How Trump's Presidency Could Shape the Future of CPG and eCommerce Brands

Founders of CPG and eCommerce brands face a rapidly shifting landscape. This week Trump's election as the 47th President of the United States is likely to see that rate of change accelerate.

With policy changes and potential market disruptions, it's essential to understand how these shifts could impact your business, your customers, and your bottom line.

Here are few areas that Future Ready CFO will be watching carefully:

1. Labor Challenges and Rising Costs

One of the administration's priorities is immigration reform, and this could directly impact labor-intensive industries like agriculture and food manufacturing. American workers tend not to want the low-paying and physically-demanding work that immigrants are willing to do. 

A mass deportation policy would create significant labor shortages, leading to higher costs throughout the supply chain—from field to shelf.

With a smaller workforce and rising wages, many CPG businesses may see increased costs in raw materials and manufacturing, and the effects will likely ripple down to retail pricing. If Trump is effective in his deportation plans, we suspect that the resulting impact on the price of goods in the US is probably going to have an impact on consumer demand, especially for more discretionary items. 

Exactly how higher prices will impact demand is as yet unclear. Healthy economies are remarkably good at rebalancing supply and demand over time, so long as the rate of change is moderate. What concerns us about Trump and his approach to implementing change is the speed with which he may do it. Rapid changes cause speed wobbles, and can result in short term duress. 

2. Tariffs and Import Costs

The previous Trump administration introduced tariffs that affected many imported goods and raw materials, and similar policies could be reinstated or expanded. In his second term, he has indicated to take an even more aggressive stance - with China in particular (going form 10% to 50%).

These tariffs would drive up the cost of imported ingredients, packaging materials, and other essential components of CPG production. For eCommerce brands importing products or materials, costs could rise almost immediately. 

We expect to see brands rushing to place bulk orders before the Chinese New Year, which may well lead to an uptick in freight rates, but assuming these tariffs have the desired impact on imports it would seem reasonable to expect downward pressure on freight rates later in the year. 

With the cost of domestic production rising, AND tougher tariffs on imports, it's unclear to me how Trump is going to fulfil his campaign promises around reducing the cost of living for the middle of America. Perhaps someone smarter than me can help me understand how this will work? 

3. Regulatory Shifts and Food Safety

Another big part of Trumps' campaign is dismantling large chunks of government, with the help of Elon Musk. $2 trillion dollars is the magnitude of cost-savings we've heard they are looking for. If this happens, we will see less regulation and less oversight across many parts of our economy. 

There’s speculation that the FDA might face funding cuts or experience a shift in regulatory priorities. A downsized FDA could lead to less stringent food safety protocols and increased risk of foodborne illnesses. While regulatory uncertainty can open opportunities for cost savings, it may also make consumers cautious. For brands, building trust and communicating food safety measures transparently will become vital.

We suspect this will fuel the already strong demand for clean ingredient lists and supply chain transparency. 

Some nasty things happen when you combine food production with capitalism, and with less regulatory oversight, consumers who care about what they are putting into their bodies are increasingly going to have to do the legwork on checking things themselves. 

4. Increased M&A Activity

With antitrust scrutiny expected to decrease, consolidation within CPG and retail sectors could accelerate. For early stage founders, this might mean facing competition from even larger players, potentially making it even harder to compete on pricing.

But it also presents an opportunity for smaller brands that can differentiate through storytelling, quality, or niche targeting. Think strategically about your unique value proposition, and be prepared to lean into your brand’s story to stand out in a more consolidated market.

What Founders Should Do Now

In the face of these potential challenges, now is the time to strengthen your cash flow model, focus on core differentiators, and plan for pricing flexibility. Whether it’s securing alternative suppliers, preparing for rising costs, or staying agile in the face of regulatory changes, proactive financial planning can provide a buffer against uncertainty.

If you'd like some help thinking through how your brand can navigate through the choppy waters ahead, feel free to drop us a line at Future Ready!