APPA Trade Talks December Office Hours: 5 Takeaways Pet Businesses Need to Act On

As we turn the page into a new year, 2026 is already shaping up to be a pivotal moment for the pet industry. New tariff actions, shifting trade alliances, evolving monetary policy, and continued pressure on small businesses are all on the horizon. Before we move full speed into what is coming next, it is important to pause and recap where we ended 2025, and what APPA members should be carrying forward into their planning and decision-making.

Our final Trade Talks Open Office Hours of 2025 brought together APPA’s trade experts to answer members' questions for a candid, practical discussion about tariffs, the courts, and the broader economic landscape. The conversation made one thing very clear: while the headlines will keep changing in 2026, there are concrete steps pet businesses can take right now to protect margins, reduce risk, and position themselves for the next wave of policy moves. Below are the top 5 takeaways APPA members should keep front and center as they navigate the year ahead.

1. A “New Normal” for Tariffs Is Emerging…Expect a 10–20% Baseline

The panel agreed that we are moving out of the emergency IEEPA/reciprocal phase and into a more formal, legally defensible tariff regime built around Section 301 and Section 232. Our expert panel discussed how the new Nicaragua 301 action is the first clear example:

• 0% in 2026
• 10% in 2027
• 15% in 2028
  stacked on top of an existing 18% reciprocal tariff

Rafe described this as a “regression to a new mean”. Rather than 50 - 100% shock tariffs, the system appears to be settling into a 10 - 20% “access fee” range, with different rates depending on the country and relationship. That is still material for pet importers, but the silver lining is that it is more predictable than the earlier spikes.

For APPA members, we are settling in on the reality that tariffs are a long-term cost of doing business, not a temporary storm that will blow over. It is important to the success of your business that you build that into pricing, sourcing, and product strategy now.

2. The Supreme Court may strike IEEPA tariffs, but refunds won’t be automatic

A major portion of the call focused on the Supreme Court challenge to IEEPA tariffs and what that could mean if the Court declares them unlawful. Earlier in the month we discussed the Costco case and how it may be a roadmap for businesses moving forward. However, The Court of International Trade (CIT) has now rejected early attempts to stop liquidation and is essentially saying: “wait for the Supreme Court, then we’ll decide how refunds work.”

Key points for members:

• Don’t panic and rush to file your own CIT lawsuit. The latest CIT decision and DOJ statements indicate that suspension lawsuits are being turned away for now.
• Do keep immaculate records. Rebecca emphasized that importers will still need to “do the legwork” if refunds become available:
  • Know exactly which entries included IEEPA/reciprocal tariffs
  • Track how much you paid, by entry, by HTS, and by date
  • Track liquidation dates even if those dates later become less critical

DOJ has indicated that, if the tariffs are found unlawful, the government would not oppose a court order requiring re-liquidation of affected entries. That could mean re-processing millions of entries and building a new portal-style system for refund claims. In that environment, companies that already have clean data will be at the front of the line.

3. Exclusions and retroactive deals are real, but the pet sector isn’t seeing relief yet

The conversation also highlighted two important realities about exclusions and trade deals:

• Human-rights-based 301s can still have carve-outs. In the Nicaragua case, goods qualifying under CAFTA-DR remain excluded from the new Section 301 tariff, even as the country is penalized for broader governance issues.
• Retroactive tariff changes are possible. A new deal with Switzerland is being implemented retroactively, allowing importers to seek refunds via post-summary corrections, protests, or, in some cases, CIT complaints. This is a first, and while it may deal with refunds on a smaller scale, it may become a template for future adjustments.

However, Rebecca was clear: there is still no formal exclusion mechanism for pet products under IEEPA, and nothing published that invites pet companies to apply for relief. Most published exclusions so far remain focused on agricultural and basic-needs items.

For APPA members, that means you should continue to monitor deals and exclusions closely, and you can continue to rely on APPA’s discussions and summaries for updates, but do not assume pet products will automatically be swept into future relief.

4.“Creative” work-arounds on Incoterms and importer of record can backfire

Several members asked whether they should change Incoterms (e.g., FOB to DDP) or shift the importer of record to a foreign vendor to lower the declared value and reduce tariffs. Rebecca’s answer was blunt, companies looking at this solution should be very careful. 

Risks include:

• New importers (especially non-resident importers) not knowing what they’re doing, leading to holds, USDA or other agency delays, and disrupted supply
• Potential misdeclaration of value or origin, which can trigger audits and penalties
  
• Loss of control over a compliant supply chain you have spent years building

Any change like this should only be done with experienced partners, strong contracts, and legal guidance, and never as a tactic to simply evade tariffs. As we have mentioned in several updates and office hours, these types of changes require a lot of foundational work, and it doesn’t mean that new tariff regulations wont end up impacting those changes.

5. Rates are falling, but small pet businesses still feel the squeeze

The team closed by connecting tariffs to the broader economy. The Fed’s recent rate cut may modestly lower borrowing costs, but:

• Policymakers still worry tariffs are adding to inflation in specific categories (coffee, bananas, certain foods)
• Small businesses are signaling price increases and feeling affordability pressure more acutely than large players
• Consumer spending remains strong in headline retail data, but that doesn’t erase margin pressure for import-heavy pet brands 

For APPA members, the key is to use any rate relief strategically. For example, to finance inventory, automation, or near-shoring investments that help you live with a 10 - 20% tariff world, not to assume the trade environment will normalize back to zero

Across all of these themes, the consistent advice from our expert panel was to stay informed, document everything, and plan for tariffs as a durable feature of the landscape. APPA will continue to translate this moving target into concrete guidance, tools, and office hours to help your business adapt and thrive.

We wish all our members and friends in the pet industry continued success for 2026 and hope you will continue to make our community stronger by sharing your questions and concerns during our first office hours of the year. In the meantime, if you have any immediate questions or concerns, please do not hesitate to reach out so we can schedule a complimentary individual call with our team of experts who are here to help you.

Join us for our first office hours of 2026 on Wednesday, January 21, from 3 pm - 4 pm ET.

Disclaimer: APPA does not make any representations about the completeness, suitability, or adequacy of the information provided in this blog.  Any information provided are intended for general informational purposes only, they do not constitute a recommendation or solicitation to do or omit to do any action and should not be interpreted as legal, regulatory, or compliance advice. You should seek independent advice from qualified professionals before acting on any information provided and/or to evaluate specific regulatory obligations and operational decisions.