Strain from tariffs spurs unexpected innovation

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Strain from tariffs spurs unexpected innovation

19 Jan 2026

Maggie Glisan

Maggie Glisan covers consumer trends and emerging markets for the Commercial Baking media group. She spent the bulk of her 15-year career as the senior food editor at Better Homes and Gardens, where she was responsible for producing, writing and editing stories and developing recipes for the monthly magazine and special interest publications. Prior to that she worked as graphic designer and assistant art director in the Food Group at Better Homes and Gardens, where she took on an increasing role in content creation and editorial development.

KANSAS CITY, MO — Supply chains aren’t the only thing tariffs are impacting. They’re slowing the pace of innovation as well. Thomas Bailey, director of government relations for the American Bakers Association (ABA), noted that the economic pressure may lead bakeries to postpone not only new projects but also product development and equipment upgrades.

“In turn, this makes it harder to invest in more efficient technologies or meet consumer demand for new products,” he said.

Shawn Marie Jarosz, founder of trade consultancy TradeMoves LLC, observed that many bakeries have adopted a “wait-and-see” approach, absorbing costs rather than immediately passing them to consumers while exploring alternative sourcing and building inventory. But she warned that strategy has limits.

“By 2026, companies will no longer be able to absorb all these costs and will have to pass them on to consumers,” she said.

On the upside, certain essential products, like palm oil, spices and tropical fruits, could see tariff relief through bilateral agreements, and potential refunds from International Emergency Economic Powers Act tariffs may provide a welcome boost to the industry.

ABA is actively urging policymakers to create a more stable trade environment, calling for tariff-free access to critical ingredients and policies that encourage fair competition and resilient North American supply chains. By pushing for clarity and consistency, the association aims to help bakeries plan strategically, invest confidently in US operations, and maintain affordable, high-quality products for consumers.

“Tariffs are challenging, but they also force companies to think differently, build stronger relationships and explore creative solutions.” — Shawn Marie Jarosz | founder | TradeMoves

“We’d like to see a more balanced trade approach that supports US manufacturing while recognizing the global nature of food production,” Bailey said. “Bakers need predictable trade policies that allow for tariff-free access to essential ingredients not available domestically. A practical approach would help companies plan long-term and make infrastructure investments here in the US.”

Jarosz emphasized that hoping for tariff changes isn’t a strategy; companies must plan diligently for 2026 and beyond.

Companies like Farinart and Rademaker are taking proactive measures such as educating customers, exploring domestic assembly and fostering open dialogue around sourcing.

For US bakeries and their suppliers, tariffs are no longer an abstract policy issue; they are a tangible factor shaping daily operations, costs and strategic choices. Some companies are absorbing added costs, others are delaying investments, and nearly all are reassessing sourcing and supply strategies.

The overarching challenge is uncertainty. Global trade shifts, pending tariff reviews and fluctuating import costs all demand careful planning. Staying informed, maintaining open relationships with suppliers and customers, and thinking creatively about sourcing and equipment assembly have become essential survival tools.

While tariffs create pressure, they also force innovation in unexpected ways. Open communication with suppliers, proactive planning for USMCA changes, and experimenting with domestic assembly or alternative sourcing are helping bakeries navigate the disruption without sacrificing growth or product development.

“Tariffs are challenging, but they also force companies to think differently, build stronger relationships and explore creative solutions,” Jarosz said.

In a dynamic trade landscape, adaptation is no longer optional. It’s the key to keeping production running, innovation moving and the American baking industry resilient.

This has been adapted from the 2025 Innovations Annual of Commercial Baking. Read the full story in the digital edition here.

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