President Trump announced last week a pause on tariff implementation for some Mexican and Canadian imports that comply with United States-Mexico-Canada Agreement (USMCA) provisions until April 2.

This provides a brief respite from the 25 percent tariffs on imports from Canada (with an exception for energy at 10 percent) and Mexico and 20 percent on imports from China announced previously.

China and Canada swiftly responded with reciprocal tariffs of their own. Canada imposed duties on $30 billion worth of U.S. goods and China is targeting American technology and agricultural products through a combination of tariffs, export/import controls and company sanctions.

Tariffs applied without adequate understanding of risks are likely to bring deleterious shockwaves throughout nearly every critical supply chain. The most obvious impacts will be felt quickly at the grocery store — prices of pantry staples will increase noticeably, supplies will wane and consumers will have fewer choices overall.

The Trump administration’s new taxes on foreign goods are intended to drive production back to the U.S. as well as curb influxes of illicit substances. Consumer Brands, in a recent Newsnation interview, highlighted the risks of sweeping solutions and encouraged a more finely-tuned approach from the administration.

Tariffs, when properly applied, have the potential to be an elegant trade and foreign policy tool. Erroneous application not only creates damaging shockwaves but also erodes any potential for appropriate use in the future where tariffs might be an efficient solution.

The administration’s goals are likely attainable, with the right approach; the White House has at its disposal a team of enormously skilled negotiators beyond the President himself. Frankly, there is a better deal to be made in service of policy goals that still protects consumers and insulates American manufacturers.

The CPG industry is the largest manufacturing sector by employment, supporting 22.3 million American jobs. The industry’s total contributions represent nearly 10% of the national GDP and supported $1.5 trillion in salaries, wages and benefits. In just the last five years, industry wages have increased 30 percent. And the industry’s impact doesn’t end there — for every single direct CPG job, 7.3 additional positions are created throughout the economy. At the same time, however, CPG manufacturers are operating on razor-thin margins compared to other industries.

A large majority of CPG manufacturing facilities are in rural areas with deep ties to agricultural tradition. U.S. CPGs are also already prioritizing domestic sourcing when possible. However, there are ingredients that cannot be sourced in adequate quantity or quality at home. Some are climate-dependent, only growing in certain parts of the world or during certain parts of the year, like coffee, cocoa and other fruits. Others can only be sourced domestically in part, due to overwhelming demand, like tin-mill steel packaging components used for canned foods as well as cleaning and household products.

As a result, U.S. CPGs rely heavily on our neighbors to the north and south to keep critical supply chains strong and resilient, as well as to keep products on shelves at reasonable prices.

Meat, grain and oilseed imports as well as processed cocoa from Canada are critical to meeting consumer demand consistently. Oats and other hardy grains are challenging to source domestically in the volume needed — taxes on Canadian imports for grain in particular would result in skyrocketing prices across a large swath of product categories.

Mexican supplies of fruits and vegetables — like tomatoes and avocados — during the winter months help U.S. companies meet demand and ensure supply chain continuity regardless of weather impediments. The U.S. is simply unable to produce and maintain enough fresh fruit and vegetables throughout the year, so when California gets too cold, production switches to Mexico to keep things running smoothly.

Many CPGs make and sell their products at home for American consumers — but those that are sent to other jurisdictions offer a unique competitive advantage. Some grain supplies from Canada, for example, are processed into grocery products like cereals and snack bars and sold back at a trade premium to Canadian retailers.

The administration’s current approach to tariff policy has drawn criticism regarding the likelihood of cost repercussions for consumers and responses in kind from now-former trade allies. Our partnerships with Mexico and Canada in particular are mutually beneficial. U.S. CPGs will only be hurt by burdensome taxes — driving up costs will hamper operations and growth for America’s largest manufacturing employer.

The Trump administration’s willingness to consider lower tariffs on Canadian energy and a delay on automotive tariffs speaks to an understanding that overly broad and sweeping tariffs aren’t always the best deal for U.S. manufacturers and consumers. It stands to reason that similar fine-tuning on tariff approaches for certain key ingredients and inputs can help to moderate inflationary impacts on grocery prices and help to insulate the Trump administration from politically and economically challenging cost increases. At the same time, that type of calibrated, strategic tariff approach could make a greater impact at the negotiating table, helping to drive an America First agenda to maximum benefit, without as many unintended consequences for U.S. CPG manufacturers and the consumers they serve every day.

Consumer Brands encourages the administration to develop an approach that is attentive to the intricacies of the CPG industry. We look forward to coordinating on trade policy and continuing to advocate for the makers of the products consumers choose and trust.