Update on Maple & Tariffs

Someone recently described this spring as the “apex of uncertainty” and, for me, that really resonated. Producers were in the midst of the season, with all of the weather fluctuations that brought varied sap flows and dips and valleys for sap sugar content. For some of you, this also meant a severe ice storm that may well have shut down the rest of your season. 

And at the same time, the federal government pulled back on USDA funding (with some producers having large federal grants frozen, even after completing their projects) and an ever-changing tariff conversation. We updated you just a couple of weeks ago about the potential tariff implications and the related news highlights. You can find that update on the VMSMA website here.

The landscape has changed significantly since that update as we waited for an April 2nd federal announcement; one which made a complex situation even more nuanced. You can read the entire federal fact sheet with the details of that day’s announcements here. It’s not light reading, but shares information on tariffs levied on a wide variety of goods and countries.

The bullet point in the April 2nd fact sheet that captured our attention read:

• “For Canada and Mexico, the existing fentanyl/migration IEEPA orders remain in effect, and are unaffected by this order. This means USMCA compliant goods will continue to see a 0% tariff, non-USMCA compliant goods will see a 25% tariff, and non-USMCA compliant energy and potash will see a 10% tariff. In the event the existing fentanyl/migration IEEPA orders are terminated, USMCA compliant goods would continue to receive preferential treatment, while non-USMCA compliant goods would be subject to a 12% reciprocal tariff.”

This means that many of the imports from Canada revert back to the USMCA or United States-Mexico-Canada Agreement which replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020. As an individual bullet point, this means that maple syrup and sugar imports (as USMCA-compliant goods) are placed at the usual 0% tariff. Maple equipment is also included in the USMCA, but here’s where some of the nuance comes in. 

While the federal government started and then paused the majority of the tariffs from April 2nd levied on individual countries for 90 days, they continued to escalate tariffs on most Chinese imports. According to a federal fact sheet issued on April 15th, the US has levied tariffs on some Chinese imports of up to 245%. 

What do all of these changes and tariffs mean for the maple industry? Good question and one that’s not all that easy to answer, even almost two weeks after the April 2nd announcement. We talked to industry leaders, the Maple Industry Manufacturers’ Association, a glass dealer in Vermont, and a large US customs broker to better understand this new landscape and how it might affect maple producers of all sizes. This flowchart offers a visual example of how complicated tariffs can be.

Bulk Syrup Imports: We’re back where we started last season with 0% tariffs on imports of bulk maple syrup from Canada. In our earlier update, we noted that in 2023 Canada exported over $368 million worth of Canadian syrup into the US, bulk and retail. Vermont and other maple producing states make amazing, high quality, sought after maple syrup, but we don’t yet make enough to supply the entire US market. Pure maple syrup has been making its way into more shopping carts (in-person and online) since the pandemic. Vermont and US maple production has been growing since well before that time, but it’s still not enough to fulfill these retail contracts. In order to maintain retail shelf space and reach consumers across the country, our US syrup is often blended with Canadian syrup to meet the demand.

Equipment Imports: We could be back on stable ground for the imports of equipment from Canada, were it not for the complexity of the new tariffs on goods from China and other countries. Equipment for sugaring is generally considered USMCA-compliant, which would mean a 0% tariff. Country of origin matters here. If equipment is assembled in Canada and the majority of components are sourced from other countries (on whom the US has levied tariffs) it may have an impact on any tariffs levied on the final product when it is imported into the US. One large equipment manufacturer told us that most of the parts in their machines are sourced primarily from Canada or the US. So, for now, the impact of tariffs on most equipment could be limited.

This same manufacturer also noted several items that do fall under the current aluminum and steel tariffs — mainly large infrastructure pieces like silos, storage tanks, and similar components. These items are generally not USMCA-compliant and most likely will be subject to a 25% tariff, as of today. 

For the good news, there’s relatively little equipment heading into the US right now. Most manufacturers pushed shipments out before the season started, so US producers’ spring needs were covered. The Maple Industry Manufacturers’ Association plans to have a meeting this week on many of these topics and should have more information to share at the end-of-month open houses. 

Container Imports: Generally speaking, most of the commodity glass containers for retail packaging come from China. Since April 2nd, the U.S. has levied tariffs on Chinese imports anywhere from 145% to 245%, depending on the goods. What does this mean for Vermont maple producers? It depends and may be, like most conversations around tariffs, a little complicated. I offer three scenarios as an example:

1. If a Canadian maple equipment dealer orders a few pallets of glass containers and sells those containers empty (as a finished product) into the US, they are still subject to the US tariff schedule as an import.
2. If a Vermont maple operation orders a few pallets of glass containers from China, they will be subject to at least a 145% tariff rate. The maple operation will have to take that cost increase into account when pricing those same retail containers filled with maple syrup or cream. 
3. If a Canadian maple operation orders a few pallets of glass containers from China and they fill those containers with maple syrup, they can export those filled containers into the US at 0% tariff as these are USMCA-compliant goods. As part of the finished product of packaged maple syrup, the containers are not subject to the tariff when imported into the US. This particular scenario offers Canadian syrup packed in retail containers a competitive advantage over US syrup packed in the same containers, given the current tariff structure.

Where do your containers come from? It’s a great question to ask your supplier. We called Bill Laporte of Artisan Printing of Vermont in Cambridge and also a supplier of VMSMA-branded retail containers. Bill said that their gallon and half gallon glass containers come from Arkansas and the majority of the other glass comes from countries throughout Europe. These European containers will currently be subject to a 10% tariff, quite a bit less than the current tariffs on Chinese containers. 

One of the lessons here is that the details matter and there are a lot of details, especially when the tariff rates and countries involved change from week to week. The unpredictability of the the rates and their timing make it difficult for us to offer updated information or for businesses to plan proactively. What’s clear is that maple syrup production is on a growth trajectory, in Vermont and the US. It is, however, hard to maintain growth with a changing cost landscape. This landscape makes it difficult to price products today when you don’t know what tomorrow’s supplies will cost. 

We hear from many producers across the state that the costs associated with producing maple syrup and running a small business have been on the rise, especially since the pandemic. And it’s important that producers can also receive a fair price for their finished products. With costs on many retail goods projected to increase, it’s unclear how consumers will make decisions about their groceries and how much pure maple syrup they’ll continue to add to their carts. Like mother nature this season, we’ll just have to wait and see, while we continue to learn and share how different aspects of the markets and federal changes impact the industry.  

News highlight: Associated Press coverage of tariff updates and potential maple impact