While the IFT Expo in Chicago is bustling, European and North American buyers are passing by Chinese food-ingredient booths in a hurry. This stark disconnect reveals three systemic challenges facing China’s food-ingredient industry under current U.S.–China trade friction:
1. High import tariffs and volatile policy
Anti-dumping duties hitting hard: On July 14, 2025, the U.S. Department of Commerce issued a preliminary anti-dumping margin of 371.62% on erythritol from China, leading to a uniform duty of 450.64%. Such rates far exceed manufacturers’ cost thresholds and cut off any price competitiveness.
Policy uncertainty persists: Although both countries suspended the additional 24% tariffs for 90 days in May 2025, the 10% baseline tariff remains intact. Moreover, the U.S. reserves the right to impose an extra 25% anti-dumping duty on specific commodities (e.g., those linked to fentanyl). European and American buyers, wary of possible cost fluctuations, are keeping procurement cautious.
2. Tech competitiveness triggers implicit resistance
Efficiency seen as a threat: China is rapidly advancing in bio-fermentation, enzyme catalysis, and other technologies, gaining cost and efficiency advantages. But instead of embracing it, some Western buyers view it as a threat. Under the pretext of “supply-chain diversification,” they’re opting for ingredients from other Asian countries.
3. Overcapacity driven by middlemen misinformation
Fake demand fuels blind expansion: Middlemen in South Asia are overstating demand for new food ingredients, leading Chinese manufacturers to overinvest in capacity. Currently, capacity utilization in the industry is below 90%, and some functional ingredient stocks are severely backed up. Take clean-label, naturally fermented baking preservatives made from wheat starch: with wheat prices at historically low levels and contract-manufacturing capacity exploding, prices have plummeted and supply now exceeds demand.
Tariff barriers plus overcapacity force Chinese producers—cut off from exports—to dump products into the domestic market at rock-bottom prices, further squeezing industry margins.
Despite these challenges, I believe time will bring solutions. Let’s hope 2026 IFT sees a marked improvement.