Tariffs shake up global spice market – Food Dive

 

Report on the Impact of US Tariff Policies on the Global Spice Trade and Sustainable Development Goals

Executive Summary

Recent United States tariff policies, including a 10% base tariff and proposed increases up to 50%, are creating significant disruptions in the global spice market. These measures threaten to escalate costs for manufacturers and consumers, undermine international trade partnerships, and create substantial setbacks for several key United Nations Sustainable Development Goals (SDGs), particularly those related to poverty, hunger, economic growth, and responsible production.

Tariff Impact on International Trade and Economic Stability

The United States imported over $2 billion worth of spices in 2024, sourcing from more than 50 countries. The imposition of tariffs on these goods directly affects the economic stability of both exporting nations and domestic U.S. businesses. The American Spice Trade Association (ASTA) has noted that these spices are essential ingredients in a vast quantity of food produced by American manufacturers. The tariffs introduce price volatility and supply chain uncertainty, with large corporations like McCormick estimating potential costs of up to $90 million annually. Smaller enterprises, such as The Spice House, face more acute risks, struggling to absorb increased costs while maintaining domestic manufacturing jobs.

Challenges to Sustainable Development Goals (SDGs)

The tariff policy presents direct challenges to the achievement of multiple SDGs:

1. SDG 1 (No Poverty) and SDG 8 (Decent Work and Economic Growth)

   Many spices, including black pepper, vanilla, and cinnamon, are cultivated in developing nations such as India, Vietnam, Brazil, and Madagascar. The agricultural sectors in these countries, often comprising small-scale farmers, depend heavily on exports to the U.S. market. Tariffs threaten the livelihoods of these farmers and the economic growth of their communities, undermining efforts to eradicate poverty and promote decent work.

2. SDG 2 (Zero Hunger)

   As most targeted spices cannot be commercially grown in the U.S., the increased import costs are expected to be passed on to consumers. This contributes to food price inflation at a time when consumer spending is already strained, potentially impacting food security and affordability for households and hindering progress toward zero hunger.

3. SDG 12 (Responsible Consumption and Production)

   The rising cost of natural spices may compel food manufacturers to substitute them with artificial flavoring alternatives. This shift would undermine the established trend toward natural ingredients and more sustainable production patterns, directly conflicting with the principles of responsible consumption and production.

4. SDG 17 (Partnerships for the Goals)

   The unilateral imposition of tariffs on countries without bilateral trade agreements weakens global partnerships and international cooperation. Such measures disrupt the stable and predictable trade relationships that are foundational to achieving the broader 2030 Agenda for Sustainable Development.

Industry Response and Recommended Actions

In response to these challenges, the American Spice Trade Association (ASTA) has formally requested tariff exemptions from the U.S. government. The association emphasizes that relief is critical for spices that cannot be commercially produced domestically, thereby preventing harm to U.S. consumers and businesses without stimulating domestic production. ASTA has identified a priority list of spices for which tariff relief is sought:

• Vanilla
• Cinnamon
• Cloves
• Cardamon
• Coriander
• Anise
• Nutmeg
• Ginger
• Saffron
• Dill
• Basil
• Sage
• Salt
• Black Pepper
• Mint leaves
• Thyme
• Bay leaves

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 8: Decent Work and Economic Growth

• The article highlights the economic threat that tariffs pose to businesses in the spice industry. It specifically mentions the risk to a “small business,” The Spice House, which “employs over 100 people,” directly connecting the trade policy to local jobs and the viability of small enterprises. The financial burden on larger companies like McCormick, which could face costs of “$90 million a year,” also underscores the negative impact on economic stability and growth within the sector.

SDG 17: Partnerships for the Goals

• The central theme of the article is the disruption of international trade due to unilateral tariffs. This directly relates to SDG 17, which advocates for a stable and equitable global trading system. The article notes that tariffs are being applied to countries without “bilateral trade agreements” and that the U.S. imports spices from “more than 50 countries,” illustrating the broad impact on global partnerships and trade flows.

SDG 2: Zero Hunger

• The article connects the tariffs to rising food costs, stating that “Higher costs threaten to raise prices for consumers at a time when food inflation is causing a pullback in consumer spending.” This link to food inflation and consumer affordability touches upon food security, a core component of SDG 2, as increased prices can limit access to food products for many households.

SDG 12: Responsible Consumption and Production

• The article suggests that due to higher costs for natural spices, the policy could “force companies to turn to artificial flavoring alternatives.” This represents a potential shift in production patterns away from natural, sustainably sourced ingredients (many of which cannot be grown in the U.S.) towards artificial substitutes, which is relevant to the goal of promoting sustainable production methods.

2. What specific targets under those SDGs can be identified based on the article’s content?

SDG 8: Decent Work and Economic Growth

1. Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.
   • The article provides a clear example of how the tariff policy works against this target by putting a “small business at risk.” The testimony of The Spice House’s CEO highlights the threat to a domestic manufacturing plant that employs over 100 people, demonstrating a direct negative impact on a small enterprise and local job creation.

SDG 17: Partnerships for the Goals

1. Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization, including through the conclusion of negotiations under its Doha Development Agenda.
   • The article describes the imposition of unilateral tariffs as high as 50% by the U.S. government. This action, taken outside of a multilateral framework, undermines the principles of an open and non-discriminatory trading system that this target aims to promote.
2. Target 17.11: Significantly increase the exports of developing countries, in particular with a view to doubling the least developed countries’ share of global exports by 2020.
   • The tariffs directly impede the ability of developing countries to export their goods. The article lists spices like black pepper from India and Vietnam, vanilla from Madagascar, and cinnamon from Sri Lanka, all of which are key exports for these developing nations. The tariffs act as a barrier, reducing their export potential to the U.S. market.

SDG 2: Zero Hunger

1. Target 2.c: Adopt measures to ensure the proper functioning of food commodity markets and their derivatives and facilitate timely access to information, including on food reserves, in order to help limit extreme food price volatility.
   • The tariffs are presented as a measure that disrupts the proper functioning of the spice market (a food commodity market). The article explicitly states this leads to “higher prices for consumers” and contributes to “food inflation,” which is a form of the price volatility this target seeks to limit.

SDG 12: Responsible Consumption and Production

1. Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
   • The article explains that most of the affected spices are natural resources that “cannot be commercially grown in the U.S.” The tariff policy creates an economic incentive to move away from these natural ingredients towards “artificial flavoring alternatives,” representing a potential inefficient use of global natural resources driven by trade policy rather than sustainability or resource management principles.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

SDG 8: Decent Work and Economic Growth

• Financial impact on companies: The potential cost of “$90 million a year” for McCormick serves as a direct financial indicator of the economic burden.
• Impact on small businesses and employment: The status of The Spice House as a “small business at risk” and the number of its employees (“over 100 people”) are key indicators for measuring the impact on small enterprises and local employment.

SDG 17: Partnerships for the Goals

• Tariff rates: The specific tariff levels mentioned (“10% base tariffs” and “as high as 50%”) are quantitative indicators of the trade barriers being imposed.
• Value and scope of trade affected: The value of U.S. spice imports (“more than $2 billion…in 2024”) and the number of trading partners involved (“more than 50 countries”) are indicators of the scale of the disruption to global trade partnerships.

SDG 2: Zero Hunger

• Food price changes: The mention of “food inflation” and “higher prices for consumers” are direct indicators of price volatility and reduced food affordability.
• Consumer behavior: The “pullback in consumer spending” is an indicator of the real-world impact of food inflation on household economies.

SDG 12: Responsible Consumption and Production

• Shift in ingredient sourcing: The potential for companies to “turn to artificial flavoring alternatives” instead of “natural ingredients” is a qualitative indicator of a shift in production patterns away from the use of natural resources.

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article.

SDGs	Targets	Indicators
SDG 8: Decent Work and Economic Growth	8.3: Promote policies that support small and medium-sized enterprises and decent job creation.	The risk to a “small business” (The Spice House). The number of jobs affected (“employs over 100 people”). Financial cost of tariffs to companies (“$90 million a year” for McCormick).
SDG 2: Zero Hunger	2.c: Adopt measures to ensure the proper functioning of food commodity markets…to help limit extreme food price volatility.	The occurrence of “food inflation”. The impact of “higher prices for consumers”. A resulting “pullback in consumer spending”.
SDG 12: Responsible Consumption and Production	12.2: Achieve the sustainable management and efficient use of natural resources.	The potential shift from “natural ingredients” to “artificial flavoring alternatives” by food manufacturers.
SDG 17: Partnerships for the Goals	17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system. 17.11: Significantly increase the exports of developing countries.	Imposition of unilateral tariffs (“as high as 50%”). Total value of spice imports affected (“more than $2 billion”). Number of trading partners affected (“more than 50 countries”).

Source: fooddive.com