APPA’s insights on tariffs, trade policy and pet businesses

In its December Trade Talks, the American Pet Product Association (APPA) has offered insight into how U.S. tariff policy is reshaping the pet products sector. Presenters Craig Brightup, Rafe Morrissey and Rebecca Rizutti examined the legal and commercial pressures importers, brand owners, manufacturers and retailers across the industry are facing. Their analysis highlighted what the recent Costco tariff refund lawsuit really represents, how rising duties are influencing sourcing strategies, and why businesses must plan for a long-term tariff environment rather than a short-lived disruption. The video briefing ended with three key takeaways:

Perhaps the most striking development is Costco’s decision to file a complaint at the U.S. Court of International Trade seeking refunds of IEEPA-based and reciprocal tariffs. The panel emphasised that the issue extends well beyond one high-profile company. By initiating litigation now, Costco is ensuring it has the legal standing required to reclaim duties should the U.S. Supreme Court later restrict emergency-power tariffs.

For APPA members, the implication is clear: businesses cannot assume they will automatically benefit from future court rulings. Smaller firms do not need to mount their own litigation campaigns, but they do need to act strategically. This means understanding tariff exposure at a granular level, working closely with customs brokers to track entries, and using procedural mechanisms such as liquidation extensions and protective protests. Some companies may choose to file CIT complaints to preserve refund eligibility, while others may rely on protests alone – albeit with heightened risk if refunds ultimately apply only to unliquidated entries. In this environment, inaction is not neutral; it can foreclose future recovery opportunities.

Tariffs on pet products have risen by roughly 29 per cent since the start of the year, placing acute financial strain on small and mid-sized businesses in categories ranging from pet food to toys and accessories. At the same time, U.S. manufacturing orders have surged, driven in part by incentives such as the ‛One Big Beautiful Bill Act’, which provides a 100 per cent tax deduction for qualifying factory investments initiated between 2025 and 2029.

Yet the panel stressed that reshoring is far from straightforward. U.S. manufacturers often lack the labour capacity to absorb new production, and many pet product categories – particularly plush goods, soft accessories and certain price-sensitive items – remain more viable to produce overseas. Most companies are therefore opting for diversification rather than full relocation, spreading production across multiple countries while monitoring which tariff authorities – IEEPA, Section 232 or Section 301 – might apply next. The message for operators is to undertake a rigorous landed-cost analysis that accounts for tariffs, logistics, lead times and supplier resilience.

Finally, the panel underscored that tariffs are unlikely to fall back to zero even if IEEPA powers are curtailed. The administration appears to be gravitating towards a more permanent tariff framework, treating duties as an ‛access fee’ to the U.S. market with typical rates in the 10-20 per cent range. More traditional instruments such as Section 301 and Section 232 are expected to play a continuing role, although volatility may diminish as the U.S.–China trade truce and forthcoming election cycle incentivise greater stability.

Despite this, businesses will still need to pay close attention to liquidation timelines. Between 270 and 314 days after entry, companies must decide whether to request extensions, file CIT complaints or prepare to protest post-liquidation. Even under steadier policy conditions, tariff management will remain a permanent fixture of cross-border supply chains.

Across all three takeaways, the guidance is consistent: Companies should take control of their tariff data, deploy the available procedural tools to protect refund rights, and maintain active engagement with APPA’s trade resources. Tariffs and supply chain realignment may be long-term features of the operating landscape, but with disciplined planning and informed decision-making, pet industry businesses can continue to safeguard margins and deliver innovative products to consumers.