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April 2, 2025 by Office of Public Outreach and Communication
Ramu Govindasamy in 2017 inspecting production trial plots during a marketing training session for smallholder farmers in Zambia. Courtesy of Ramu Govindasamy.
By Ramu Govindasamy, professor and extension specialist in the Department of Agricultural, Food and Resource Economics
Prof. Ramu Govindasamy.
The recent announcement of sweeping new tariffs by the United States government has sent ripples through the global trade landscape. With a 10 percent general tariff imposed on most imports and a targeted 20 percent tariff on products from the European Union, the food and beverage sector is poised to experience significant disruptions. Of particular concern are the potential impacts on the produce and wine industries, which rely heavily on international trade for both supply and demand. These impacts would be particularly pronounced in New Jersey, a state known for its vibrant food distribution hubs, diverse culinary markets, and extensive food and beverage manufacturing sector.
Produce
Higher Costs and Tighter Supply Chains in the Garden State:
New Jersey plays a central role in the U.S. produce supply chain, thanks to its large ports, warehouse networks, and transportation infrastructure. A significant portion of imported produce entering through the Port of Newark and surrounding logistics centers is distributed to retailers across the Northeast. In 2023, New Jersey imported approximately $13 billion worth of food and beverage products, ranking second among U.S. states in this category. The sector employs over 280,000 individuals, highlighting its importance as a major employment source within the state. The 10 percent tariff on imported goods, while not yet specifically targeting fresh produce, threatens to increase operational costs for New Jersey-based importers, wholesalers, and grocers. Additionally, many New Jersey grocers source off-season produce from Central and South America and are heavily reliant on timely imports to meet year-round demand. Any disruption caused by trade tensions or increased tariffs on agricultural equipment and inputs can result in price hikes of 15 percent or more for items such as lettuce, tomatoes, and avocados. These increases will be most visible in urban areas with large populations that rely on affordable fresh produce, such as Newark, Paterson, and Jersey City.
Wine
Economic Strain on Importers and Retailers Across New Jersey:
New Jersey has a robust wine market, bolstered by both a growing local wine industry and a high demand for imported European wines. The 20 percent tariff on EU wines and spirits will likely have a noticeable effect across the state. Retailers and distributors in communities such as Hoboken, Montclair, and Princeton, which cater to consumers with an appetite for imported wines, are already forecasting decreased variety and increased prices. New Jersey importers and restaurant owners may be forced to scale back their European wine offerings due to higher wholesale costs. A bottle of imported wine that once sold for 20 dollars may now retail for 24 to 26 dollars, a change that could reduce consumer demand and squeeze restaurant profit margins. At the same time, New Jersey wineries may see a modest boost in local sales, but they too are facing rising input costs, supply chain bottlenecks, and shifting consumer trends toward low-alcohol and sustainable alternatives.
The Broader Food and Beverage Industry in New Jersey
New Jersey is home to more than 1,000 food and beverage manufacturing establishments, making it one of the most vital contributors to the state’s economy. These include processors of baked goods, beverages, dairy products, sauces, and ethnic foods that rely on imported ingredients and packaging materials. Tariffs on European and other foreign imports will likely raise the cost of specialty ingredients such as olive oil, cheese, spices, and preserved goods that are critical to many of these operations.
Increased production costs could lead to slimmer profit margins for food manufacturers, particularly small and mid-sized businesses that cannot absorb the price shocks. Some manufacturers may need to reformulate products, find alternative suppliers, or cut back on product lines. This could also affect employment in the sector, which supports tens of thousands of jobs in cities like Camden, Elizabeth, and Secaucus.
Restaurants and foodservice operators, a major part of the state’s hospitality industry, are also vulnerable. Many rely on imported foods and beverages to support internationally themed menus and unique culinary offerings. Higher costs and reduced availability of key ingredients may force changes in menu offerings, pricing, and overall business strategy.
Ramu Govindasamy, professor and extension specialist in the Department of Agricultural, Food and Resource Economics, in the field. Courtesy of Ramu Govindasamy.
Broader Implications for New Jersey’s Food Economy
The state’s dense network of restaurants, farmers markets, and ethnic grocery stores will feel the ripple effects of these tariffs. Menu prices may rise, specialty products may become harder to source, and smaller businesses with less pricing flexibility could struggle to absorb the cost increases. Low-income communities in New Jersey, which are already grappling with affordability and food access, will be disproportionately affected by rising food prices.
According to a 2025 analysis by the Yale Budget Lab, the cumulative impact of all enacted tariffs could result in an average household cost increase of 3,800 dollars annually, a burden that will hit working families in New Jersey’s urban and suburban areas especially hard. Inflationary pressures are likely to persist in the short to medium term, particularly if retaliatory tariffs or further trade conflicts emerge.
In response, New Jersey businesses are exploring domestic sourcing options, greenhouse production, and local partnerships to insulate themselves from global market fluctuations. Trade groups representing food retailers, importers, and manufacturers have begun lobbying state and federal officials to seek targeted relief for affected sectors.
Key Products Likely to Experience Notable Effects
Imported Produce (Fruits and Vegetables): New Jersey imports a substantial portion of its fruits and vegetables, especially during off-season periods. Tariffs on imports from countries like Mexico and Canada are expected to raise the costs of these essential items. For instance, products such as tomatoes, avocados, and berries, which are commonly imported, may see price increases. This escalation in costs could lead to higher retail prices, affecting both consumers and businesses that depend on these imports.
Wine and Spirits: Approximately 13.5% of New Jersey’s food and beverage imports come from Italy, and 6.2% from France, indicating a significant portion of wine and spirits imports. The imposition of a 20% tariff on European wines and spirits directly affects New Jersey’s robust market for these products. Retailers and distributors may face increased costs, leading to higher prices for consumers and a potential reduction in variety. This scenario could diminish sales and impact businesses specializing in these imports.
Seafood: A significant portion of seafood consumed in New Jersey is imported, with estimates indicating that 70–85% of seafood in the U.S. comes from international sources. Tariffs on these imports could lead to increased prices for products like salmon and shellfish, impacting both retailers and restaurants that offer seafood dishes. Consumers may face higher prices or reduced availability of certain seafood items.
Specialty Ingredients (e.g., Olive Oil, Cheese, Spices): New Jersey’s food manufacturers and restaurants often rely on imported specialty ingredients to create diverse culinary offerings. Tariffs on products from the European Union and other regions may increase the costs of items such as olive oil, cheeses, and various spices. This could lead to higher operational costs for businesses and potentially higher prices for consumers.
Packaged Foods (e.g., Pasta, Cookies, Crackers): Imported packaged foods from Canada and Mexico, including pasta, cookies, and crackers, are subject to tariffs that may increase their prices. This affects retailers who stock these items and consumers who purchase them, potentially leading to shifts in purchasing habits or seeking alternative products. The new tariffs represent a critical juncture for New Jersey’s food industry. While intended to bolster domestic production, they risk destabilizing the intricate trade networks that keep food shelves stocked, prices manageable, and consumer choices diverse. As one of the key logistical and cultural centers of the East Coast food economy, New Jersey will need to adapt quickly to these changes, balancing resilience with innovation in the face of ongoing global trade tensions.