Hershey battles cocoa tariffs as chocolate costs rise
Hershey, the well-known chocolate manufacturer, is in negotiations with the administration of U.S. President Donald Trump regarding tariffs. The company is seeking an exemption from cocoa tariffs. The chocolate giant estimates that these restrictions could force it to dip into its reserves, generating additional costs amounting to 20 million dollars.
The challenge is that cocoa is not grown in the U.S., which requires Hershey to import this raw material, primarily from the Ivory Coast and Ghana. Additional tariffs could significantly affect chocolate prices.
Hershey warns of rising chocolate prices
Hershey (the maker of popular candies such as Kisses and Reese's Peanut Butter Cups) informed investors about potential increases in production costs. In the second quarter of 2025, tariffs could raise the company's expenses by 15-20 million dollars. However, in the following months, costs could rise by as much as 100 million dollars.
The company, based in Pennsylvania, is working intensively with the U.S. government and trade organizations, trying to convince the Trump administration to exclude cocoa from the list of tariffed goods.
Currently, basic tariffs on cocoa are around 10 percent. However, the U.S. President has threatened to impose additional retaliatory tariffs of 21 percent on the Ivory Coast, which would be the highest level among West African countries.
Additionally, Canada, an important partner in cocoa processing, has also imposed retaliatory tariffs, posing an extra challenge for U.S. companies like Hershey, which ranks as the fourth-largest chocolate producer by revenue, earning 10.3 billion dollars in 2023.
Cocoa troubles: Producers alter prices and compositions
Tariffs are not the only concern for candy manufacturers. High cocoa prices are resulting from challenging weather conditions, crop diseases, and increasing demand. At the turn of 2024 and 2025, cocoa beans hit a record price of 12,000 dollars per ton on the exchanges.
