Import tariffs are taxes charged on goods crossing into the country, paid to customs by whoever is named the importer of record. If you buy your olive oil from a distributor rather than from Italy, you are not that person, and yet the duty still reaches you, buried inside a case price with no line item explaining it.
That indirect route is what makes tariffs so hard to manage. You cannot negotiate a tax, you usually cannot see it, and the supplier passing it on has no reason to itemise it. Meanwhile the ground under all of this shifted hard in February 2026, when the Supreme Court struck down the tariffs that had driven most of the increases operators felt through 2025.
This covers who legally pays, what actually still applies to food purchases, how to work out your actual exposure rather than your assumed one, and what to do about the part that remains. Tariffs are the one input cost that does not respond to any of the levers that bring food costs down without cheapening the plate, which is exactly why they need separating from the costs that do.
Key Takeaways
The importer of record pays the duty to customs, not the foreign seller. For most food businesses that is your distributor, who passes the cost through inside the case price.
On 20 February 2026 the Supreme Court ruled 6-3 that the International Emergency Economic Powers Act does not authorise tariffs, striking down the reciprocal and “fentanyl” duties along with the 40% Brazil and 25% India tariffs (Flexport, retrieved 2026-09-29).
Section 232, Section 301 and ordinary MFN duties were untouched and remain fully enforceable. What remains is narrower, not gone.
Refunds are live. As of 31 July 2026, CBP had accepted roughly $128.68 billion in potential and certified refunds for processing. If you are an importer of record, the protest deadline is 180 days from liquidation.
Most operators overestimate their exposure. Work out what share of your food spend is imported before you build a strategy around it.
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Who actually pays an import tariff
The importer of record pays. That is the party legally responsible for declaring the goods and paying duty to US Customs and Border Protection at the point of entry: normally the buyer or consignee, sometimes a licensed customs broker acting for them. The exporting country does not pay it, and neither does the foreign producer.
For a bakery, florist, caterer or wholesaler, this almost always means somebody else. Your distributor imports, clears customs, pays the duty, and sells you a case. The duty is then part of their landed cost, which becomes part of their price to you. By the time it reaches your invoice it is indistinguishable from the ingredient itself.
Who bears the cost is a separate question from who remits it. Research from the Federal Reserve Bank of New York found that close to 90% of the economic burden of the 2025 US tariffs landed on US importers and consumers rather than foreign sellers, arriving as higher costs and higher prices (DHL, retrieved 2026-09-29). The practical translation: expect pass-through to be near-total, and do not plan on your supplier absorbing much of it.
This is also why a tariff increase looks different from every other cost increase on your books. A commodity spike eventually reverses. A supplier’s price rise can be re-bid. A duty is a fixed percentage applied at a border to a specific classification of goods, and no amount of shopping around removes it, because every distributor importing the same item pays the same rate.
What changed in February 2026
On 20 February 2026 the Supreme Court decided Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc. by 6-3, holding that while the International Emergency Economic Powers Act permits the president to regulate imports during a declared emergency, it “does not clearly authorize the imposition of duties” (Flexport, retrieved 2026-09-29).
That removed the reciprocal tariffs, the “fentanyl” duties applied to China, Canada and Mexico, the 40% Brazil tariff and the 25% India oil duty. A 10% global tariff was then imposed under Section 122 effective 24 February 2026, but that authority is time-limited and it expired on 24 July 2026.
The practical consequence for food buyers is that most of the broad, headline-grabbing tariff pressure of 2025 is gone, and a good deal of the tariff content still circulating describes a world that ended in February. If your supplier is still quoting a 2025 tariff surcharge on a category that was covered by IEEPA, that is a conversation worth having.
Some relief predated the ruling. On 14 November 2025 an executive order lifted tariffs on a list of grocery and foodservice staples: coffee and tea, tropical fruit and juice, cocoa and spices, bananas, oranges, tomatoes, beef and fertilizers (Nation’s Restaurant News, retrieved 2026-09-29). National Restaurant Association CEO Michelle Korsmo called it “needed relief for restaurants and their customers at a time when food costs have risen nearly 40% over the past four years.” Note the second half of that sentence: removing a tariff stops the increase, it does not reverse the prices already reached.
Which tariffs still apply to what you buy
The ruling was narrow in a specific way: it addressed one statutory authority, not tariffs as a concept. Three categories survived intact:
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Section 232 duties, covering steel, aluminium and copper, plus autos and heavy trucks. Revised rates took effect on 2 April 2026, with additional duties of 50%, 25% or 15% depending on product classification and derivative status. For a kitchen this is not an ingredient issue but an equipment and packaging one: commercial refrigeration, stainless prep surfaces, shelving, cans and foil trays all carry metal content.
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Section 301 tariffs, principally on Chinese goods. Again, more likely to touch your smallwares, packaging and equipment than your food.
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Ordinary MFN duties under the Harmonized Tariff Schedule. These are the routine, long-standing rates that have always applied to imported food and were never part of the dispute. Cheese, wine, certain sugars and various prepared goods carry them, and they have not moved.
So the shape of your exposure has probably changed rather than disappeared. The pressure moved off broad food categories and stayed on metal-intensive capital goods and packaging, which is a different problem altogether, hitting your refit budget and your delivery containers rather than your daily order guide.
How to work out your real tariff exposure
Most operators dramatically overestimate this, because tariffs have been in the news constantly and every price rise gets attributed to them. Do the arithmetic before you build a plan.
Pull three months of purchase data and sort by spend. For each of your top twenty lines, establish one thing: is the item imported, and from where? Your distributor’s rep can usually tell you, and country of origin is on the case label. Add up the spend on the imported lines and express it as a percentage of total food spend.
Most independent food businesses in the US land somewhere between 5% and 20%. At the bottom of that range, a 10% duty on the imported portion moves your total food cost by well under a point: real, but not the reason your margins are down. At the top, with a menu built on imported cheese, oil, seafood and wine, it matters a great deal and deserves a strategy.
You need dish-level costs to act on this, because exposure is never evenly spread. Two dishes on the same menu can have wildly different import content, and the only way to see that is to have costed both. If you have not built that out yet, our walkthrough of a recipe costing template gets you a cost per portion you can then tag by origin, at which point the question “which dishes are tariff-exposed” answers itself.
Refunds: what importers of record can still claim
If your business is the importer of record on any entries — some wholesalers, importers and larger caterers are — there is money in play.
CBP launched its Consolidated Administration and Processing of Entries system on 20 April 2026 to handle IEEPA refunds. By 31 July 2026 more than 75,000 CAPE declarations had been submitted, 17.69 million validated entries had been liquidated without IEEPA tariffs, and approximately $128.68 billion in potential and certified refunds had been accepted for processing.
Three things matter operationally. The protest deadline is 180 days from the liquidation date, and missing it forecloses eligibility entirely. Entries that were subject to both IEEPA and Section 232 duties generally received no IEEPA refund on those lines, because the Section 232 preference exempted them from IEEPA collection in the first place. And entry accuracy matters, because once an entry is attached to a CAPE claim it cannot be corrected through a post summary correction, so errors need fixing first.
If you are not the importer of record, none of this is yours to claim. It is, however, worth knowing your distributor may be receiving substantial refunds on goods you bought at tariff-inclusive prices. Whether any of that flows back to you is a commercial conversation, and it is a reasonable one to open at your next price review.
Absorb, substitute, or reprice
Once you know your exposure, there are only four responses, and the right one depends on how much of your basket is affected and how substitutable it is.
| Response | When it fits | What it costs you |
|---|---|---|
| Absorb it | Exposure under a couple of points of food cost; the item is core to your identity | Margin, but it buys time and protects the product |
| Change origin | A comparable product exists from an untariffed country or domestically | Sourcing effort, and a real risk of a quality change |
| Change the ingredient | The imported item is not what customers come for | Recipe work; low risk on background ingredients, high on signature ones |
| Reprice | Exposure is broad, sustained, and affects a defined set of dishes | Some volume, but it is the only durable answer to a permanent cost |
The failure mode to avoid is a blanket response. Raising every price because of a duty that touches 8% of your basket loses volume you did not need to lose. Swapping out a signature imported ingredient to save 30 cents on a dish people specifically come for costs more than the duty ever did. Match the response to the exposure, dish by dish.
Domestic substitution deserves a caution of its own. When a tariff pushes demand onto domestic supply, domestic prices tend to rise too; that is the mechanism working as designed. A domestic alternative that looks cheaper the week you check may not stay that way, so re-cost it a quarter later before you commit to a permanent switch.
The cash-flow gap nobody budgets for
For businesses that do import directly, tariffs create a timing problem separate from the cost problem: duty is payable when the goods clear customs, but you do not sell them for weeks or months afterwards. On a $50,000 shipment carrying a 25% duty, that is $12,500 leaving the business before a dollar of revenue comes back.
Two mechanisms exist for this. Foreign-Trade Zones, administered by CBP, allow goods to be admitted without duty payment until they enter US commerce, so duty is deferred rather than paid on arrival (U.S. Customs and Border Protection, retrieved 2026-09-29). And duty drawback allows an importer of record to recover up to 99% of duties paid on goods that are subsequently exported, relevant if you supply across borders, irrelevant if everything you buy is consumed locally.
Both are worth a conversation with a customs broker if you import at volume. Neither does anything for the far more common case, which is a business that buys imported goods from a domestic distributor and never touches a customs entry. For that business, the tariff is simply a price, and it gets managed as a price.
Frequently asked questions
Do import tariffs apply to food?
Ordinary Harmonized Tariff Schedule duties have always applied to many imported foods and still do. The broader emergency tariffs imposed in 2025 were struck down in February 2026, and a list of staples including coffee, tea, cocoa, spices, bananas, oranges, tomatoes and beef had already been exempted in November 2025. Which rate applies depends on the specific product and its country of origin.
Who pays import tariffs, the buyer or the seller?
The importer of record pays customs directly, which is the US-side buyer or their broker, never the foreign exporter. Economically the cost is then passed down the chain, and evidence from the 2025 round suggests close to 90% of it reached US importers and consumers.
Can a restaurant avoid import tariffs?
Not directly, unless it is the importer of record and can use a Foreign-Trade Zone or drawback. What it can do is reduce exposure: switch origin, substitute the ingredient, or reprice the affected dishes, after working out which part of its spend is imported.
Will tariff refunds lower food prices?
Not automatically. Refunds go to whoever paid the duty at entry, which for most food businesses is the distributor rather than the operator. Whether that shows up in case prices depends on competition between distributors and on whether their customers ask.
How do tariffs differ from other food cost increases?
A tariff is fixed by classification and origin, applies identically to every importer, and cannot be negotiated away. Ordinary price rises can be re-bid, re-specced or waited out. That difference is the whole reason to separate the two before deciding what to do.
What to do this month
Work out your import percentage first. Twenty line items and an afternoon gets you a number, and that number determines whether this is a strategic issue or a distraction from an ordinary purchasing problem.
If it comes back low, stop here and put the effort into the levers you actually control. If it comes back high, tag your dishes by import content, decide response by response rather than across the board, and check whether any tariff surcharge still sitting on your invoices relates to an authority that stopped existing in February.
