While analysts globally have suggested that the broader economic impact of recent US tariffs has been less severe than initially expected, the #petindustry has experienced a disproportionate effect.
According to the American Pet Products Association (APPA), tariffs affecting the US pet sector rose by approximately 29% over the past year. The association warns that this increase is placing significant pressure on businesses across the industry, particularly smaller players.
Patrick O’Brien, Chief Marketing Officer at APPA, said the cost burden is becoming increasingly difficult for companies to absorb.
Rising Costs Put Pressure on Small Businesses
Speaking during APPA’s December Trade Talks, O’Brien noted that higher tariffs are intensifying challenges for small and mid-sized pet businesses.
He added that orders for US-manufactured goods surged in September, indicating that tariff policy may be encouraging companies to shift production and capital investment back to domestic manufacturing.
However, the transition has not been without complications.
Companies Seek Ways to Minimize Tariff Impact
O’Brien explained that many APPA members are actively exploring alternative sourcing strategies to reduce exposure to tariffs. Several companies reported “scrambling” to identify suppliers in other countries as part of broader diversification efforts.
One commonly cited approach involves shifting portions of production away from China toward third-country manufacturing hubs.
According to Rebecca Rizutti, owner of global trade services provider Progressive Trade and a participant in the discussions, the impact of tariffs varies widely by product category.
She noted that items such as plush toys, soft goods and certain #petaccessories often remain more cost-effective to manufacture overseas, even when higher import tariffs are applied.
Manufacturing Returns to the US—With Limitations
Some #petcompanies are turning to US-based manufacturing as an alternative, although capacity constraints remain a significant hurdle.
Several businesses reported to APPA that domestic factories lack sufficient labor to accommodate new production orders. This shortage limits how quickly companies can shift manufacturing back to the US.
Craig Brightup, CEO of government relations consulting firm Brightup Group, highlighted the potential role of new legislation in addressing these challenges.
The “One Big Beautiful Bill Act,” signed into law on 4 July 2025, allows a 100% tax deduction for qualified production property costs, providing a substantial incentive for US manufacturing investment.
Policy Support May Not Ease Short-Term Pressure
Despite its long-term potential, the legislation offers limited relief in the near term. The tax incentive applies only to facilities whose construction begins between January 2025 and January 2029, leaving current capacity constraints largely unresolved.
Brightup also emphasized the need for greater investment in workforce development and training to ensure the availability of skilled labor needed to support domestic manufacturing growth.
Planning for a “New Normal”
Rafe Morrissey, President of Morrissey Strategic Partners, cautioned that tariffs are unlikely to be eliminated in the short term. He advised #petbusinesses to prepare for a future in which moderate tariff-related costs persist.
APPA shares this view, suggesting that a 10%–20% tariff increase may represent the industry’s new baseline rather than a temporary disruption.
Legal Challenges and Industry Response
In early December, major retailer Costco filed a lawsuit against the US administration in the Court of International Trade, seeking a refund of reciprocal tariffs paid on imported goods.
The legal action has prompted other companies to reassess their exposure and monitor the potential for tariff refunds. APPA recommends that its members carefully track all product entries subject to tariffs and consider requesting extensions on duty liquidation where applicable.
Source: GlobalPETS