“We’re seeing a shift in international focus,” mentioned Shaheen Majeed, international CEO and managing director of world well being science firm Sabinsa, which manufactures and provides branded complement substances. “A number of firms in our sector are redirecting their industrial efforts to areas like Southeast Asia, the place tariff publicity is decrease and market alternatives are increasing. It’s not as a result of they need to deprioritize the U.S.—it’s as a result of the economics are forcing diversification.”
Tariffs below the second Trump administration
On April 2, 2025, Trump claimed unprecedented tariff authority below the Worldwide Emergency Financial Powers Act (IEEPA) to levy country-based “reciprocal tariffs” on imports from practically all nations.
Anand Swaroop, PhD, CEO of complement producer Cepham, mentioned he despatched way more representatives from his firm to final yr’s VitaFoods Asia commerce present than in earlier years, acknowledging the significance of Asia’s shoppers for the way forward for the complement trade.
“Southeast Asia is explosive as of in the present day, and I feel we consult with it as a ‘remainder of the world’ market that might be of equal or barely extra worthwhile than the U.S. market by 2030,” he mentioned.
In keeping with market analysis agency Statistica, the complement market in Southeast Asia will surpass $200 billion within the close to future. The U.S. complement trade is predicted to succeed in greater than $131 billion by 2033.
The push towards different markets is a results of tariffs that may hinder U.S. market competitiveness, because the complement sector in the US has skilled extra shockwaves than some other area as a result of taxes. Each Swaroop and Majeed acknowledged that tariffs on India’s botanical imports play a big position due to the sheer quantity of products that transfer from India to the US every week.
In 2025, the U.S. levied as much as 50% tariffs on imports from India, a lot of which impacted members of the American Natural Merchandise Affiliation (AHPA).
“We’ve been specializing in India till very just lately as a result of its U.S. commerce delegation’s been in energetic negotiations with the U.S. authorities,” mentioned Robert Marriott, vp of regulatory and authorities affairs at AHPA. “There’s been no different offers signed with them within the course of, and since it’s one of many locations the place the strongest narrative is out there for nationally unavailable assets [in the United States]. What I can share is that we’ve now collected an extra tranche of knowledge from our members concerning different nations the place there are points with naturally unavailable assets, and we’re making selections now about which different commerce delegations we might have interaction with. Based mostly on preliminary evaluation, these might embrace China, in fact, the European Union and South Africa.”
The U.S. advantages from specialised pure substances, and India is a significant provider of botanicals, extracts and nutraceutical actives. When tariff buildings disproportionately goal a selected commerce hall, comparable to India to the US, the ripple impact is rapid. Ingredient prices distort, buyer procurement patterns shift and long-standing worth propositions are altered in a single day, Majeed mentioned.
One instance of a product which has been impacted is Sabinsa’s India-produced melatonin. Earlier than the current tariff’s started, the corporate’s melatonin was priced competitively and was even cheaper than China-origin materials.
“As soon as the tariff construction escalated, the economics flipped totally,” Majeed mentioned. “We didn’t change our manufacturing prices, our yields or our efficiencies. Nothing modified on the science or provide aspect. The one change was the tariff burden imposed on Indian-origin items, and all of the sudden a product that had been a cheap answer for U.S. prospects turned costlier than the Chinese language different. This wasn’t a functionality problem however a policy-driven problem.”
Mushroom ingredient provider Nammex, whose headquarters are in Canada, spent years transport its supplies to the US for warehousing and order success. Nammex sources the mushroom uncooked supplies for its extracts primarily from organically cultivated farms in China.
“Now we’re taking a look at shifting stock and therefore enterprise out of the US to be able to be tariff free for worldwide prospects,” mentioned Skye Chilton, CEO of Nammex. “Corporations are much less aggressive internationally if they’re importing into the US, paying tariffs after which exporting the merchandise.”
Can prospects be cushioned from the tariff burden?
There are a number of the reason why complement firms are exploring different markets, and long-term tariff influence on prospects is a major one.
Wilson Lau, president of Nuherbs, which gives wholesale Chinese language herbs, mentioned uncertainty within the provide chain has compressed buyer margins, affecting shoppers’ potential to go on the rise in value as rapidly because the tariffs change.
Like many suppliers, Nuherbs has been compelled to go on among the new import taxes value to its prospects, whereas internalizing most of the bills and avoiding a full pass-through of the tariffs.
“As ingredient suppliers, particularly botanicals, our margins aren’t excessive,” Lau mentioned. “We held off at first as a result of it modified seemingly day by day, one week 145%, then 30%, then 500% was threatened. We waited till issues stabilized considerably earlier than elevating our costs to offer stability and certainty.”
He added that a number of of the introduced greater tariffs on China had been largely public speaking factors, a part of negotiating ways.
The China-United States commerce warfare
In 2025, the “warfare” subjected 60% of U.S.-China commerce to twenty% tariffs.
“Though there have been sure days—perhaps even weeks—the place the tariffs had been greater; for essentially the most half, the tariffs on China have been constant this yr,” Lau mentioned. “However they’re greater than they had been.”
India, nevertheless, is an instance of how risky the atmosphere turned. The tariff trajectory climbed from a common 10% baseline launched April 2025 to a 25% India-specific tariff efficient in August, adopted by a rise to 50% tied to broader geopolitical penalties round India’s vitality and oil relations.
“By all of this, we stored our core product pricing secure and used the separate tariff line merchandise to mirror solely the 40% we handed via, which was a deliberate determination to cushion the influence on our companions,” Majeed mentioned. “Whereas there have been discussions about doable rollbacks, India has not seen any tariff aid to this point. As a result of we stored these prices separate from our base pricing—and since we handed on lower than the total authorities burden—we prevented fixed value fluctuations all year long. Sabinsa absorbed operational burdens the place we might and maintained constant per-kilogram pricing.”
All types of current tariffs on imports from India have affected Sabinsa’s enterprise throughout the US, from nutraceuticals to cosmeceuticals to the pet care ingredient phase. The influence additionally extends to contract manufacturing, a secondary enterprise for Sabinsa.
Tariffs positioned on India
In August 2025, the US imposed a 25% tariff on a number of Indian items. Later that month, the tariff price was basically doubled to 50% on many Indian merchandise as a punitive measure for India’s continued import of Russian oil. A 2026 U.S. sanctions invoice might doubtlessly place a 500% tariff on Indian items.
“We might see tariffs on imports from different nations affecting pricing, for instance, on capsules or bottles manufactured in China or Vietnam,” Majeed mentioned. “Supplies sourced from China various these previous few months; some distributors had items stateside, however that gained’t be the case because the months proceed. Equally, element suppliers (capsules, bottles, lids, and so on.) all have taken a longer-term method and have applied new pricing from the beginning of the month, with no value rollbacks.”
Nammex, like most firms, mentioned it can’t shoulder the extra import taxes and their ripple results. Chilton mentioned the corporate held off so long as doable however needed to go some extra prices on to prospects.
Tariffs usually are not new to the complement trade. In the course of the Biden and first Trump administration, tariffs totaled roughly 25% for some Chinese language substances. Jim Emme, CEO of the pure merchandise producer NOW Well being Group, famous that United States Commerce Consultant officers have made it clear that the complement trade has operated with these tariffs for practically six years and to not anticipate any aid from these tariffs.
“We’ve not but handed many tariff prices on to our prospects,” he mentioned. “We had pre-purchased vital portions of many tariff-sensitive supplies, and these inventories have shielded our prospects from the tariff-affected value adjustments. We’re presently operating out of many non-tariff stock gadgets, so we notified our prospects a number of weeks in the past that we’d be growing some costs to offset the tariff- affected stock gadgets. We’re not doing an ‘throughout the board’ improve on all of our completed good gadgets, simply these which have been impacted by the tariff-associated value will increase.”
How have prospects responded? Some are reshaping product formulation, what Majeed refers to as ‘skimpflation’ within the complement aisle. Customers may discover turmeric merchandise with 20% curcuminoids might outsell the once-patented 95% variations the place the well being advantages reside. Shopper value sensitivity is rising, and types are reformulating accordingly. They’re additionally curbing R&D, sources instructed NutraIngredients.
In keeping with AHPA’s Marriott, some firms are shifting manufacturing outdoors of the US, as a result of it’s cheaper to usher in the completed product than it’s to usher in one thing unfinished and course of it right here.
Can firms plan for tariffs?
Complement firms weren’t fully caught off guard by tariffs provided that President Trump introduced throughout his final run for workplace that he would levy these new taxes. Corporations labored to arrange themselves for the influence.
“Based mostly on feedback from the White Home, we used a country-of-origin method to forecasting, whereas contemplating demand portions and lead instances,” Emme mentioned. “We pre-purchased from the nations that the White Home had indicated there could be tariffs or commerce points. It wasn’t an ideal system, but it surely had helped to climate the storm. We funded most of those purchases from our money reserves to be able to preserve our prices down.”
Nuherbs attributed its weathering of tariffs to longstanding relationships with its suppliers in China, who prolonged their provider cost phrases, as a means of buffering the impact of tariffs.
“Banks have a tendency to not lend or finance throughout unsure instances like this,” Lau mentioned. “And in the event that they did, the rate of interest must be handed onto the purchasers, who might not conform to a rise of value by that proportion. That’s a hidden additional value of those tariffs that isn’t talked about very a lot, however for lots of products, that provides to the will increase shoppers will finally pay.”
Nammex might put together solely as much as a sure level however mentioned it didn’t have the capability, financing or warehousing to drag six to 12 months of stock ahead like Walmart or Goal might.
“In the course of the interval the place tariffs stored altering, we needed to time our orders to keep away from the very best import taxes after we might,” Chilton mentioned. “It was annoying, as a result of it takes time for materials to be shipped and there was all the time the query of what proportion the tariffs could be when the fabric lastly arrived within the U.S.”
Sabinsa’s Majeed added that there’s a frequent assumption that firms can simply ‘put together’ for tariffs and that the truth is extra complicated as a result of nature-derived substances can’t function on a tariff-friendly timetable.
“You can’t speed up a harvest cycle or extraction course of just because a coverage might or might not change,” he mentioned. “That’s why, regardless that we anticipated some degree of tariff exercise, we couldn’t forecast the magnitude or the timing with certainty.”
Cepham’s Swaroop mentioned that Indian farmers at the moment are transitioning from rising important crops for the complement trade to different gadgets not affected by tariffs. He famous that the actual influence will seem in the midst of Q1 and Q2 2026.
Nonetheless, the trade is just not fully with out precedent. The COVID-19 pandemic supplied worthwhile classes in getting ready for financial uncertainty. In the course of the pandemic, lengthy lead instances confirmed companies like NOW how fragile provide chains will be throughout instances of disruption and underscored the significance of taking a proactive method reasonably than ready to reply to tariffs.
“What we discovered with COVID with the provision chain scenario was that we needed to order supplies from abroad with 30 days discover, we must order it 60 days, then 90 days, then on into 4 and 6 months forward,” mentioned Cal Bewicke, CEO of ingredient provider Moral Naturals. “We had been simply having conferences at our firm each week and speaking to our customs brokers and transport brokers in international nations to search out out when issues could be obtainable. We had been additionally speaking to our prospects and getting projections from them.”
In the course of the pandemic and the period of current tariffs, suppliers typically maintain massive portions of uncooked supplies, manufacturing bigger batches for firms like Moral Naturals.
Corporations additionally closely trimmed working prices to generate financial savings and protect prospects from value will increase in that interval. Companies expanded provider relationships, secured different transport routes, elevated safety-stock on key supplies when seasonally possible, enhanced real-time communication and improved inner forecasting to mannequin a number of disruption eventualities.
Cepham’s Swaroop famous that the pandemic differed from the present tariff predicament. Whereas logistics had been constraints in the course of the pandemic, complement manufacturing itself didn’t disrupt manufacturing, as uncooked supplies remained obtainable even when items couldn’t simply be transported.
“The primary classes that play in our minds from the COVID-19 pandemic middle on threat, resilience and provide chain continuity,” Majeed mentioned. “These classes completely knowledgeable how we approached the tariff atmosphere below Trump 2.0. Throughout COVID, we realized the laborious means that disruption doesn’t all the time include warning indicators, and that pace, transparency and diversified contingency planning usually are not optionally available. They’re survival instruments.”
