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If a few months ago the ‘shrinkflation’ phenomenon went viral as an economic macro-trend, alluding to the shrinking of products and the increase in their prices, it could become even more acute within the United States due to Donald Trump’s plans to impose 25% tariffs on Canadian and Mexican products.
That announcement on 1 February would send Canada into panic mode, announcing similar tariffs on a wide range of products; while its liquor shops pulled US products such as bourbon and beer from their shelves. From the internet, Canadians also wanted to impose their position by cancelling their holidays to the US, as a move to support Canadian businesses and boycott US product.
Last Thursday, Trump would go a step further in his move with tariffs, applying ‘reciprocal tariffs’ to products from any country that imposed tariffs on US goods. According to The Hill, these tariffs would be tailored to each foreign trading partner based on five factors: tariffs the nation imposes on US products, taxes the US deems ‘unfair’, the cost to US businesses and consumers due to another country’s policies, exchange rates and any other trade practices the trade representative’s office deems unfair.
Thus, faced with the threat of a new trade war in the food sector, experts say the industry is likely to respond by raising prices or by discreetly reducing costs through smaller portions or reformulation of ingredients.
