In February 2025, a US government statement on tariff hikes sent shockwaves through the global dietary supplement industry, much like a boulder dropped into a calm lake. The US announced a 10% tariff on imports from China. Simultaneously, it planned a 25% tariff on goods from Canada and Mexico (although the latter was suspended for 30 days due to negotiations on drug smuggling and border security issues). However, the tariff on China came into effect in February. China quickly responded with retaliatory tariffs. These series of measures have made the already complex and volatile international trade situation even more unpredictable, and the dietary supplement industry is facing unprecedented challenges and opportunities.
I. The Global Dietary Supplement Market and the Pattern of Chinese Raw Material Supply
In recent years, the global dietary supplement market has been booming. With the enhancement of people's health awareness and the increasing demand for nutrition supplementation and health management, dietary supplements have gradually become an integral part of daily life. Behind this huge industry, the supply of raw materials is the foundation. China plays a pivotal role in the global supply of dietary supplement raw materials. Most basic supplement raw materials such as vitamin C, B vitamins, amino acids, and coenzyme Q10 mainly come from China. Loren Israelsen, President of the United Natural Products Alliance (UNPA), clearly pointed out that China dominates the supply of many key nutritional materials and even has an almost monopolistic position in manufacturing the starting materials for nutrients and other ingredients. This means that the US supplement industry has a high dependence on the supply of raw materials from China.
II. Tariff Impact: Soaring Costs and Supply Chain Turmoil
The direct consequence of the US tariff hikes is a significant increase in import costs. For many US dietary supplement companies that rely on raw materials from China, this is undoubtedly a heavy blow. In the past, companies could purchase high - quality raw materials at relatively stable and reasonable prices, maintaining a balance between production and operating costs. But after the tariff increase, an additional 10% has to be paid for each purchase of raw materials. Taking a medium - sized dietary supplement manufacturer as an example, if it imports raw materials worth \(500,000 from China every month, it will have to spend an extra \)50,000 per month after the tariff hike. This is no small amount, and over time, it will greatly compress the company's profit margin.
The impact of tariff policies on the supply chain is like a powerful earthquake, shaking the very foundation of the entire industry. The stability of the supply chain is crucial for the normal operation of enterprises, and the increase in tariffs has made this chain extremely fragile. Many US companies have taken actions to cope with this crisis.
(I) The Pros and Cons of Increasing Inventory
Increasing inventory has become the first choice for many companies. They purchase large quantities of raw materials in advance, trying to stockpile enough supplies to maintain production for a certain period before the impact of tariffs further expands. However, this strategy is not without drawbacks. Increasing inventory means occupying a large amount of capital and warehousing space, increasing the company's capital turnover pressure and warehousing costs. Moreover, excessive inventory also carries the risk of product backlog and expiration.
(II) The Difficult Game of Negotiating Order Quantities with Customers
Negotiating order quantities with customers is also a common response method for enterprises. Companies will explain the current difficulties to customers, hoping that customers can understand and adjust the order quantity. Some companies will propose to extend the order delivery cycle to ease production pressure; others will discuss cost - sharing issues with customers to seek a solution acceptable to both parties. But this negotiation is not always smooth. Customers also have their own cost considerations and market demands. Once the negotiation fails, companies may face the risk of losing orders.
(III) The Many Hurdles in Re - evaluating the Supply Chain Layout
Re - evaluating the supply chain layout is a more long - term response strategy. Some companies try to seek alternative suppliers and turn their attention to other countries and regions. But the reality is harsh. For many key nutrients such as folic acid and vitamin D3, China is still the irreplaceable main supplier. Other countries and regions are difficult to compete with China in terms of raw material production, quality, and price. In the short term, it is almost impossible to find suitable alternative sources. Some companies consider increasing domestic production, but this also faces many challenges. Building new production facilities requires huge capital investment and also needs to solve a series of problems such as technology, talent, and raw material supply. This is a huge challenge for companies, and it is difficult to achieve large - scale production in the short term.
Cal Bewicke, CEO of Ethical Naturals, has good reason to be concerned. Although companies have taken various measures, the supply of low - cost products will gradually decline in the next few months. This is because increasing inventory can only solve the problem for a while. As inventory is consumed, if a stable and low - cost raw material supply channel cannot be found, the cost of products will inevitably rise. And there are many difficulties in finding alternative suppliers and increasing domestic production. Before these problems are effectively solved, the shortage of low - cost product supply will become an inevitable trend.
III. Market Pattern Remodeling: Declining International Competitiveness
The impact of tariff policies goes far beyond the supply chain and costs; it may also reshape the entire industry's market pattern. In the US domestic market, tariffs have led to an increase in the cost of supplement products. To maintain a certain profit margin, companies have to raise product prices. And the price increase directly affects the competitiveness of products in the international market. In the global market, consumers are extremely sensitive to prices, especially in the field of dietary supplements where products are highly substitutable. After the price of US supplement products rises, consumers may turn to similar products from other countries with more affordable prices.
Originally, some US dietary supplement brands occupied a certain share in the international market with their brand influence and product quality. But after the implementation of tariff policies, the advantages of these brands have gradually been weakened. Taking the European market as an example, European consumers will comprehensively consider factors such as price, brand, and quality when choosing dietary supplements. After the price of US products rises, European local brands and products from other countries with lower prices will have more market space. The market share of US brands may be squeezed, which is undoubtedly a huge blow to the US dietary supplement industry.
IV. Trade Organizations Speak Out: Industry Concerns and Actions
US trade organizations have also acutely perceived the potential crisis brought about by tariff policies. The Consumer Healthcare Products Association (CHPA) of the US expresses deep concerns about tariff policies. They are well aware that this policy may have an adverse impact on the supply of consumer healthcare products that American families rely on. Dietary supplements, as an important part of consumer healthcare products, the stability of their supply is directly related to the health and quality of life of the public. If product supply is insufficient or prices are too high due to tariffs, it will bring unnecessary economic burdens and health risks to American families.
The Council for Responsible Nutrition (CRN) in the US is also taking active actions, closely monitoring the development of tariff policies and deeply evaluating their potential impact on member companies. They organize expert teams to conduct a comprehensive analysis of tariff policies, studying their possible impacts on companies at different levels. At the same time, the CRN is also communicating with government departments, calling on the government to reconsider tariff policies to protect consumer interests and industry stability. The actions of these trade organizations reflect the high attention of the entire industry to tariff policies and concerns about the future development of the industry.
V. Enterprise Response Strategies: Flexible Transformation and Cooperative Development
Facing the huge uncertainties brought about by tariff policies, Loren Israelsen, President of the United Natural Products Alliance (UNPA), predicts that the industry will face turmoil for at least the next six months. During this period, brands need to show extremely high flexibility to survive this storm. For enterprises, adapting to new trade relations and supply chain layouts is the key to future development.
(I) Closely Monitor Policy Developments
Closely monitoring policy developments is the first step for enterprises to respond. Policy changes often bring market fluctuations. By understanding the policy trends in a timely manner, enterprises can make preparations in advance. Companies can set up a special policy research team to pay attention to every move of the US government and the Chinese government in trade policies. For example, pay attention to information such as tariff adjustments and trade negotiation progress. Once a new policy is introduced, enterprises can quickly respond and adjust their procurement, production, and sales strategies.
(II) Flexibly Adjust Strategies
Flexibly adjusting strategies is the key for enterprises to survive this crisis. Enterprises can try to optimize the product structure, reduce dependence on raw materials greatly affected by tariffs, and develop new product formulas. For example, for products that rely on Chinese vitamin C raw materials, other ingredients with similar effects can be studied for substitution, or the vitamin C content in the product can be adjusted to reduce costs while ensuring product efficacy. In terms of market expansion, companies can increase the development of the domestic market. The US domestic market is huge. When the international market competitiveness is affected, deeply cultivating the domestic market can provide a stable sales channel for enterprises. At the same time, enterprises can also strengthen brand building, increase product added value, and alleviate the negative impact of price increases by enhancing the brand image.
(III) Strengthen Cooperation and Innovation
From a more macro perspective, tariff policies not only affect the economic interests of the dietary supplement industry but may also damage the relations between the US and its long - term allies, thereby affecting the US's "soft power" in the global market. International trade relations are based on mutual trust and cooperation. The trade protectionist behavior of imposing tariffs will make other countries have doubts about the US trade policy and affect the US's image in the global trade system.
In today's era of global economic integration, the economic ties between countries are increasingly close, and it is difficult for any country to achieve sustainable economic development in isolation. The US's behavior of imposing tariffs may protect some domestic industries in the short term, but in the long run, it is not conducive to the healthy development of the US economy. This impact is particularly evident in the dietary supplement industry. While facing difficulties in raw material supply and a decline in market competitiveness, US companies have also lost the opportunities for cooperation with China and other countries in raw material supply, technology research and development, etc. And these cooperations are crucial for the innovation and development of the industry.
In this tariff storm, the dietary supplement industry is not without opportunities. Crisis often coexists with opportunities. For some powerful enterprises, this may be an opportunity for transformation and upgrading. Enterprises can use this opportunity to increase investment in research and development and improve their core competitiveness. For example, develop more innovative products to meet the increasingly diverse needs of consumers; or develop more advanced production technologies to improve production efficiency and reduce production costs.
At the same time, cooperation among enterprises has become more important. In the face of common difficulties, US dietary supplement enterprises can strengthen exchanges and cooperation with domestic counterparts and international partners. Through cooperation, enterprises can share resources, share risks, and jointly deal with the challenges brought about by tariffs. For example, enterprises can jointly purchase raw materials to obtain more favorable prices; or jointly carry out technology research and development to improve the overall technical level of the industry.
The US's measure of imposing a 10% tariff on Chinese goods has brought comprehensive and profound impacts on the dietary supplement industry. From the increase in supply chain costs, to the change in the market pattern, and then to the uncertainty of the future development of the industry, enterprises are facing unprecedented challenges. But as the ancient saying goes: "When the going gets tough, the tough get going." In this crisis, as long as enterprises maintain a keen market insight, closely monitor policy dynamics, flexibly adjust strategies, and actively seek cooperation and innovation, they may find new development opportunities in the predicament and achieve a breakthrough. In the future, with the continuous changes in the trade situation, the dietary supplement industry will face more challenges and opportunities. Let's wait and see how this industry forges ahead in the wind and rain and writes a new chapter.
Reference：
Israelsen, L. (2025). Personal communication with the author, as the President of the United Natural Products Alliance (UNPA).
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