How Tariffs and Inflation Are Hitting Holiday Sweets

Americans are paying more for all kinds of festive products this year, from decorations to toys to holiday wine. Persistent food inflation means they’re shelling out for another beloved part of the holiday season: home-baked goods and other sweet treats.

The prices of sugar and sweets “were 5.3 percent higher in August 2025 than in August 2024,” according to the Department of Agriculture’s Economic Research Service. The Trump administration’s tariffs are a key factor driving up the cost of baking ingredients. The U.S. imported nearly $205 billion worth of food products last year and relies heavily on other countries to send goods that can’t be produced domestically in a cost-effective way, year-round, or in great enough numbers to meet demand.

Those include many baking staples and higher-quality items such as European butter and Madagascar vanilla beans. The U.S. imports over $5 billion of cocoa and chocolate products every year, for example, which is necessary since almost no cocoa is grown domestically. Vanilla, cinnamon, and nutmeg all “require tropical conditions and cannot be cultivated domestically on a commercial scale,” noted American Spice Trade Association Executive Director Laura Shumow in April. Certain fruits, oils, and sweeteners are frequently imported and are especially vulnerable to tariffs.

It’s easy to take for granted the amazing system of global trade that allows Americans to buy the ingredients needed to make a batch of gingerbread cookies or a loaf of banana bread. There simply aren’t available or affordable domestic substitutes for many items on a holiday baking list, leaving them subject to the whims of a trade-warring president.

Those hoping to buy some ready-made holiday goodies instead may find themselves with fewer options than last year as businesses struggle to cope with rising costs. Lara Adekoya, owner of the Los Angeles bakery Fleurs et Sel, told CBS News in September that she was absorbing an additional $3,000 to $4,000 per month thanks to tariffs, keeping her from expanding her business. Georgia’s Sugarless Sweets, a gluten-free and sugar-free bakery, blamed tariffs on monk fruit for its closure this summer. Prices for its preferred sweetener had tripled, owner Bo Couzzart told Fox 5 Atlanta.

Stories like these have popped up across the country, which shouldn’t come as a surprise given the scale of tariff-related disruptions. “From January to June, commercial bakers paid $182 million in tariffs on raw materials, ingredients, equipment and supplies versus $70 million over the same period last year,” noted Milling & Baking News, an industry publication, citing data from the American Bakers Association. “During the same period, tariffs on imported baked foods cost $132 million, or $110 million more than the same period in 2024 on approximately the same value of goods.”

President Donald Trump exempted a wide range of agricultural products from his high tariffs last month, including coffee, cocoa, bananas, and some spices. But the tariffs on the books are still expansive and continue to affect many imported food products and food packaging components, such as aluminum and steel.

“It is hard for the average shopper to know which products are subject to extra tariffs and which are not,” given that “duty exemptions are not for all foods,” noted Alan Wm. Wolff, senior fellow at the Peterson Institute for International Economics. Cheese and honey “are not covered on the list of exemptions,” for instance. “Perhaps it would be best to do one’s grocery shopping with a customs broker available and on call.”

Several analysts warn that consumers won’t see relief in the grocery store just yet. “Food and commodities that have risen in price were purchased and imported under higher tariffs and stored in warehouses,” noted CNBC in November. “Retailers need to sell at higher prices to recoup costs,” meaning price increases—and any tariff exemption–related price decreases—could take time to kick in.

Given how unpredictable the Trump administration’s tariff regime has been, businesses and consumers will continue to deal with economic uncertainty. One thing is clear: Tariffs have raised the prices of all sorts of products that Americans want and need. That could mean a bit less holiday cheer in the kitchen this year.