Average CPG tariff impact on COGS by vertical, 2026: 1,750 to 7,500 bps and what 8 public brands disclosed

Every CPG operator we work with is asking the same question in 2026: how exposed is my P and L to this tariff regime, and how does my number compare to public peers? The blanket answers ("China is 30 percent, footwear is 50 percent") are wrong by a factor of two in either direction depending on your HS chapter and exemption status. This page collects what the macro data, the effective-rate models, and the public 10-Ks have actually said about 2025 and 2026 CPG tariff impact, sized for operators running $5 million to $150 million in revenue.

The macro number every CPG operator should pin to the wall

US federal customs duties revenue ran at $364.3 billion seasonally adjusted in Q4 2025, up from $97.0 billion in Q1 2025. That is a 3.7x jump in nine months, the cleanest single proxy for tariff dollars landing on importers. Q1 2026 stepped down slightly to $346.2 billion SAAR as the IEEPA-based reciprocal tariffs were struck down by the Supreme Court and replaced with Section 122 of the Trade Act of 1974 (a 10 percent global surcharge on a 150-day window).

That is the dollar denominator. The volume denominator moved in the other direction. US goods imports from China collapsed from a $43.0 billion peak in September 2024 to $19.0 billion in February 2026, a 56 percent drop. The April 2025 collapse coincides with the reciprocal tariff announcement and has not recovered.

Hold those two charts side by side. Duties revenue roughly 3.7x while China-import value roughly halves means the implicit effective rate on China-origin goods went up about 6 to 7x. That is the macro version of what each individual brand is feeling at the SKU level.

The 2026 tariff stack, explained in 4 layers

For any China-origin CPG SKU, the 2026 duty load is a stack of four to six separate components. Get the stack right and you can model your exposure cleanly. Get it wrong and you under-budget by 10 to 30 percentage points.

Layer 1: MFN base rate. The Most Favored Nation rate from the Harmonized Tariff Schedule (HTSUS). Apparel runs 5 to 32 percent depending on fiber and construction. Finished cosmetics run 0 to 6.5 percent. Most finished consumer electronics run 0 to 5 percent. Footwear can run up to 37.5 percent at MFN alone.

Layer 2: Section 301 (China-specific). Lists 1 through 3 carry a 25 percent rate. List 4A carries 7.5 percent. List 4B remains suspended. Select strategic categories (EV batteries, semiconductors, critical minerals) moved to 25 to 100 percent in the 2024-2026 review. Mainstream CPG lines mostly sit in List 4A (7.5 percent) or earlier 25 percent lists. The USTR maintains 178 active product-specific exclusions through November 10, 2026.

Layer 3: Section 232 (metals and copper). A separate 25 to 50 percent applies to steel, aluminum, and many derivative products. Semi-finished copper and copper-intensive derivatives (cables, connectors) carry 50 percent. Section 232 is excluded from Section 122 (it stacks separately), so steel cookware out of China can land at 50 percent or more on top of MFN and Section 301.

Layer 4: Section 122 (10 percent global surcharge). In force February 24 through July 24, 2026 unless extended. Applies on top of the existing stack for most importers. Annex II exempts USMCA-qualifying Canada and Mexico goods, pharmaceuticals, critical minerals, energy, some agricultural items, and many electronics (laptops, smartphones, consoles).

AD/CVD (anti-dumping and countervailing duties) can pile case-specific rates of 50 to 200 percent or more on individual products. MPF (0.3464 percent) and HMF (0.125 percent) are administrative fees on top of everything. Read the layers as additive in percentage-point terms, not multiplicative.

China-sourced effective tariff rate by CPG vertical: the 10-vertical grid

Once you stack the layers across HS chapters, you get a wide spread by vertical. Below are the China-sourced effective rate bands for the 10 CPG categories most operators we work with care about. Section 122 is in force; brands using FTZs, bonded warehousing, first-sale-for-export valuation, or active exclusion petitions can realize materially lower numbers than the listed bands.

The same data, with the stacking notes that drive each band, sits in the table below.

HS chapter	Vertical	Stacking notes	Effective rate range
HS 33	Mass beauty and cosmetics	MFN 0-6.5% + S301 List 4A 7.5% + S122 10%	18% to 25%
HS 21	Supplements and functional food	MFN 0-10% + S301 List 3 25% + S122 10%	35% to 45%
HS 39	Plastic housewares	MFN 3-6.5% + S301 List 3 25% + S122 10%	38% to 42%
HS 61/62/63	Apparel and textiles	MFN 5-32% + S301 List 4A 7.5% + S122 10%	22.5% to 49.5%
HS 64	Footwear	MFN 0-37.5% + S301 List 4A 7.5% + S122 10%	17.5% to 55%
HS 73	Steel cookware and housewares	MFN 0-6.5% + S232 25-50% + S301 25% (S122 exempt)	50% to 75%+
HS 85 (Annex II exempt)	Consumer electronics (laptops, phones, consoles)	MFN 0% + S301 List 4B suspended + S122 exempt	0% to 7.5%
HS 85 (strategic)	Consumer electronics components (PCBs, semiconductors)	MFN 0% + S301 25-50% + S122 (variable)	25% to 50%+
HS 94	Furniture	MFN 0-7% + S301 List 3 25% + S122 10%	35% to 42%
HS 95	Toys and games	MFN 0-6.5% + S301 List 4A 7.5% + S122 10%	17.5% to 24%

The bottom of the band (consumer electronics at 0 to 7.5 percent) reflects the suspended List 4B plus Section 122 carve-outs. The top of the band (steel cookware at 50 to 75 percent and above) reflects Section 232 stacking on top of Section 301. Most DTC brands we work with sit in the middle: apparel 22.5 to 49.5 percent, footwear 17.5 to 55 percent, beauty 18 to 25 percent, supplements 35 to 45 percent.

What 8 public CPG brands have actually disclosed

Public-company filings are the most reliable single-brand data we have, but even the best disclosures stop at gross-margin basis points or gross-dollar headwind. Tariffs are not a standalone P and L line item, so the metrics below come from earnings call commentary, MD and A gross-margin bridges, and management guidance rather than a clean GAAP line. Apples-to-apples comparison across brands is hard.

Company	Ticker	Vertical	Disclosed metric	Value	Source
Tapestry	TPR	Apparel and leather goods	Gross-margin headwind, Q3 FY26	-180 bps	FY26 Q3 press release, 2026-05-07
Tapestry	TPR	Apparel and leather goods	Gross-margin headwind, Q2 FY26	-190 bps	FY26 Q2 press release
YETI	YETI	Drinkware and outdoor hardgoods	FY2025 tariff gross-margin hit	-230 bps (about $42M implied)	FY2025 10-K, filed 2026-02-27
e.l.f. Beauty	ELF	Mass beauty	FY2026 blended tariff rate	~55% (vs ~25% prior year)	Q4 FY2026 earnings, May 2026
Newell Brands	NWL	Housewares, writing, baby	2026 gross cash tariff impact	$130 million	Q1 2026 earnings call
Helen of Troy	HELE	Housewares and beauty tools	FY2026 gross tariff impact (unmitigated)	$50 to $55 million	Q3 FY2026 investor slides
Helen of Troy	HELE	Housewares and beauty tools	FY2026 net operating income impact	Less than $30 million	Q3 FY2026 investor slides
Capri Holdings	CPRI	Luxury accessories and footwear	Tariff refund receivable, Q4 FY26	$40 million	Q4 FY26 earnings call
Crocs	CROX	Footwear	Q1 FY26 gross-margin change (not isolated to tariffs)	-90 bps adjusted	Q1 FY26 earnings, May 2026
Edgewell Personal Care	EPC	Razors and personal care	Inventory pulled forward to bridge tariff	Not quantified	FY26 Q2 press release

A few patterns worth pulling out. Tapestry has the cleanest serial disclosure (190 bps in Q2 FY26, 180 bps in Q3 FY26), and management says it is fully offset in guidance via pricing and sourcing mix. YETI's 230 bps for FY2025 is the largest clean public gross-margin number we found, with roughly $42 million implied tariff cost (230 bps of $1.84 billion FY2025 revenue). Newell pulled their China supply-chain exposure from 35 percent to 10 percent over a multi-year program (the model the rest of the comp set is implicitly chasing). e.l.f.'s 55 percent blended rate is the highest single-company tariff rate we found disclosed in this cycle and a useful upper-bound reference for a China-heavy beauty operator.

The unwritten lesson: even the best-disclosed brands top out at gross-margin bps. Nobody breaks out "Section 301 as percent of COGS" cleanly because tariffs flow through inventory and into COGS without a dedicated line. Operators have to model their own exposure from HS code up.

Here's an illustrative scenario we have modeled for mid-sized apparel operators considering a partial Vietnam shift. A brand sourcing primarily out of China on List 4A lines is carrying an effective rate in the high 40s once Section 122 stacks. Moving a portion of production to Vietnam typically pulls that blended rate down by 15 to 20 percentage points on the shifted units, since Vietnam apparel runs MFN plus the Section 122 10 percent baseline rather than Section 301 plus Section 122. The real-world friction is consistent across the operators we have walked through this: lead times stretch by a quarter or more during qualification, and Vietnam unit costs typically run a low-single-digit percent above the China benchmark. Even with those frictions, the landed-cost math usually still favors the shift when the China-specific stack sits above 30 percent.

The 2026 operator playbook: a 4-step exposure model

Stop using one-number heuristics. Build a SKU-level grid and benchmark against the public comp set. Four steps.

Step 1: Build your top-10 SKU exposure grid. Columns: SKU, annual import value (USD), HS 6-digit code, country of origin, current landed-cost ratio. Pull HS codes from your customs broker if your team does not already track them. Add a column for whether the line has an active Section 301 exclusion through November 10, 2026 (USTR maintains the list).

Step 2: Apply the effective-rate band. Use the vertical band from the chart above as your high and low. Compute gross tariff dollars per SKU at midpoint. Annualize. That number is your unmitigated gross exposure before any pricing or mitigation.

Step 3: Subtract the mitigation levers you have already deployed. Five common ones: (a) price pass-through (estimate the percent you actually raised in 2025 and 2026), (b) supplier price concessions (renegotiated FOB), (c) dual-sourcing percent shifted to non-China origin (Vietnam, Mexico, India), (d) FTZ or bonded warehouse utilization, (e) Section 301 product-exclusion petitions filed. Net these against your gross exposure.

Step 4: Compare your net headwind to the public comp. Convert your net exposure to basis points of gross margin (tariff dollars divided by revenue). 250 bps is a reasonable heuristic ceiling, interpolated between Tapestry's disclosed 180 bps and YETI's 230 bps; land above it and you are likely under-mitigating versus the public CPG comp set. If you land below 100 bps and you are sourcing 50 percent or more from China, double-check your landed-cost calc; you may be missing duty that is sitting in freight or in supplier invoices rather than in your tariff line.

Worked example. A $20 million beauty brand sourcing 70 percent of COGS from China on List 4A lines. COGS as percent of revenue is 35 percent, so COGS dollars are $7 million. China-sourced COGS is $4.9 million. China-specific incremental duty rate (Section 301 7.5 percent plus Section 122 10 percent) is 17.5 percent. Gross unmitigated tariff dollars: $4.9M times 17.5 percent equals $858,000, or roughly 430 bps of revenue. If pricing already covered half ($430,000) and a sourcing shift covered another 20 percent ($170,000), net exposure is about $260,000 (130 bps). That puts the brand under the YETI line, close to the Tapestry line.

What's next: Section 122 expiry in July 2026

Section 122 (the 10 percent global surcharge) is set to expire automatically on July 24, 2026, 150 days from the February 24 invocation. Yale Budget Lab models three scenarios for the overall US effective tariff rate after that date:

• Lapse: overall effective rate falls from 11.8 percent to about 9.7 percent. CPG verticals currently in the 22.5 to 50 percent band get back roughly 10 percentage points of headroom.
• Partial extension (China only): China-specific effective rate stays near 30 percent. Other origins reset to MFN plus Section 232 where applicable. This is the scenario most importers are quietly modeling.
• Full extension or permanence: Yale projects 12.2 percent overall. Likely paired with a fresh Section 301 review or a 232 extension on additional metals.

The single operator decision riding on this: do not sign a long-dated tariff-mitigation contract (multi-year FTZ lease, Vietnam factory commitment, locked-in price pass-through to wholesale partners) before late July. The cost of waiting six to eight weeks is small. The cost of committing to a 12.2 percent assumption that lapses to 9.7 percent is large.

Sources and methodology

FRED macro series. Customs duties from FRED series B235RC1Q027SBEA (BEA NIPA Table 3.1 line 4: Federal government current tax receipts, taxes on production and imports, customs duties, SAAR, billions USD, quarterly). China imports from FRED series IMPCH (US imports of goods from China, balance-of-payments basis, NSA, millions USD, monthly). Both accessed 2026-05-29. The BEA customs-duties figure is the federal-receipts measure (cash basis) and differs slightly from CBP collections (accrual). Both move together at quarterly frequency.

Effective tariff rate sources. Yale Budget Lab "State of US Tariffs" April 8, 2026 vintage (with earlier February 21 and March 9 vintages cross-referenced for the post-IEEPA-ruling transition). Penn Wharton Budget Model "Effective Tariff Rates and Revenues" April 15, 2026. USAFacts answer page "What is the average US tariff rate?" filtered to China, which sources USITC DataWeb monthly data. Camtom's 2026 China Importer Guide for HS-chapter-level MFN and Section 301 list assignments.

Section 122 and IEEPA timeline. The April 2, 2025 IEEPA reciprocal tariffs were struck down by the Supreme Court in early 2026. The administration invoked Section 122 of the Trade Act of 1974 on February 24, 2026 for a 150-day window expiring July 24, 2026, imposing a 10 percent global surcharge with Annex II exclusions covering steel and aluminum (Section 232 covered), USMCA-qualifying Canada and Mexico goods, pharmaceuticals, critical minerals, energy, some agricultural items, and many electronics.

Public-company tariff disclosure. Drawn from 2025-2026 10-K filings (accession numbers cited where available), 10-Q press releases, earnings call transcripts via Business Wire and PRNewswire, company IR materials, and reputable trade press including Retail Dive, Cosmetics Business, and Supply Chain Dive. The 10-K filings themselves typically do not quantify Section 301 as a percent of COGS; the company-specific dollar headwinds and basis-point gross-margin impacts in the table are drawn from MD and A bridges, earnings commentary, and management guidance, not from a standalone GAAP P and L line.

Limitations. The vertical effective-rate bands are synthesized estimates from MFN ranges, Section 301 list assignments, and Section 122 stacking rules, not a direct USITC DataWeb query at the HS chapter level. Section 122 is dynamic, with expiry July 24, 2026 unless extended. Bands assume list-price imports; brands using bonded warehouses, FTZs, first-sale-for-export valuation, or duty drawback can materially reduce realized rates. The Tapestry, YETI, Newell, and Helen of Troy figures are as disclosed by management and may be optimistically scoped (excluding indirect tariff impact passed through by US-domestic suppliers). Smaller private DTC brands ($10 to $150 million GMV) often face higher effective rates than the public comp set because they lack scale to negotiate supplier concessions, qualify for exclusion petitions, use FTZs, or absorb landed-cost team headcount. Treat the public-comp bps as a floor, not a benchmark, for private brands.

Update cadence. This tracker is refreshed quarterly. Next update target: August 2026 once the Section 122 expiry decision lands and the next Q2 earnings round of public 10-Q tariff disclosures is in.

The research bundle behind this post is on file at new-blogs/to-be-published/average-cpg-tariff-impact-percent-cogs-by-vertical-2026/research.md, including the full FRED CSVs, the public-company disclosure table with citations, and the synthesized HS-chapter effective-rate calculations.

For more on how tariff exposure ties into the rest of the CPG operating model, see our fractional CFO for ecommerce overview and the DTC layoff and hiring tracker for Q2 2026.

Frequently asked questions

how much have tariffs actually increased cost of goods sold for cpg brands in 2026?

Depends on your sourcing mix and HS chapters. For a China-heavy brand, the China-specific uplift (Section 301 plus Section 122) is typically 17.5 to 35 percentage points on landed cost. If 70 percent of your COGS is China-imported finished goods on a List 1-3 line, that maps to roughly a 25 to 30 percent COGS uplift before any pass-through. Public comps like YETI (230 bps gross margin) and Tapestry (180 bps) give you a floor benchmark.

what is the average us effective tariff rate on china imports right now?

Penn Wharton Budget Model put the effective rate on China imports at 31.6 percent in February 2026. USAFacts and USITC data show 30.7 percent on average across January and February 2026. That is roughly 5x the pre-2025 baseline. It is also a portfolio average, so your specific HS chapters may run materially higher or lower.

which cpg vertical is hit hardest by the 2025-2026 tariff schedule?

Steel housewares and cookware (HS 73) lead at 50 to 75 percent effective rates because Section 232 metal duties stack with Section 301. Plastic housewares (38 to 42 percent), supplements (35 to 45 percent), and furniture (35 to 42 percent) sit in the middle. Apparel and footwear are wide (17.5 to 55 percent for footwear) because MFN base rates vary so much. Consumer electronics on Section 122 exempt lines run as low as 0 to 7.5 percent.

what is section 122 and how is it different from the april 2025 reciprocal tariffs?

Section 122 of the Trade Act of 1974 is a 150-day emergency tariff tool. After the Supreme Court struck down the IEEPA-based reciprocal tariffs in early 2026, the administration invoked Section 122 on February 24, 2026 to keep a 10 percent global surcharge in force through July 24, 2026. Annex II carves out many electronics, pharmaceuticals, USMCA-qualifying goods, and Section 232 covered metals (which keep their own stack). Unless extended, it expires automatically.

how do i calculate my own tariff exposure as a percent of cogs?

Three inputs. First, the share of unit COGS that is China-imported customs value (call it p). Second, the China-specific incremental duty rate from Section 301 plus Section 122 plus any Section 232 (call it t). Third, multiply: COGS uplift roughly equals p times t. Example: 85 percent of COGS is China-imported on a 25 percent Section 301 line plus 10 percent Section 122 gives t of 35 percent. 0.85 times 0.35 equals about 30 percent COGS uplift before pricing actions.

should i shift sourcing from china to vietnam or mexico to cut my tariff bill?

Sometimes. USMCA-qualifying Mexico goods are Annex II exempt from Section 122 and face no Section 301, so apparel out of Mexico can land 25 to 40 percentage points lower than the same garment out of China. Vietnam sits at the 10 percent Section 122 baseline plus its own MFN, usually 10 to 25 percent total. But watch transshipment (Section 232 derivative rules and country-of-origin marking get audited) and capacity (Vietnam apparel and Mexico furniture are tight). Newell pulled their China share from 35 percent to 10 percent over several years, not months.

what did yeti, e.l.f., and tapestry actually disclose about tariffs in 2026 filings?

YETI took a 230 bps gross-margin tariff hit in FY2025 (10-K filed February 2026) and is moving production outside China. Tapestry disclosed 180 bps in Q3 FY26 and 190 bps in Q2 FY26, fully offset in guidance. e.l.f. flagged a roughly 55 percent blended tariff rate in fiscal 2026, up from about 25 percent, with $58.5 million in IEEPA refunds pursued and an August 2025 list-price increase of about $1 per SKU.

what is the gross-margin headwind in basis points for a $20m brand sourcing 70% from china?

Roughly 1,500 to 2,500 bps unmitigated, with a 2,000 bps midpoint. At 70 percent China share and a 35 percent China-specific duty rate on List 1-3 lines, the landed-cost uplift on those units is about 24.5 percent of COGS. At a 40 percent baseline gross margin, that flows to roughly 1,500 to 2,500 bps of compression before pricing pass-through, depending on your COGS-to-revenue ratio. Public comps suggest mitigated outcomes can land closer to the YETI (-230 bps) or Tapestry (-180 bps) range with active pricing and sourcing diversification.