PHOENIX — The cost of sugar is something Phoenix chocolatier Jay Levine has definitely noticed.
“Originally, I'm from Canada, and going back to Canada and looking at the price of sugar there, it's a lot less,” he said. “It's like almost half price of what it is here.”
High sugar tariffs that have been in place for decades. The cost of sugar is double what it is in the rest of the world because of a combination of those tariffs, import restrictions and farmer subsidies.
“The U.S. sugar program is basically a program that supports sugar prices way above the world market prices by essentially closing the border to foreign competition,” said international trade expert John Beghin, a professor at the University of Nebraska-Lincoln.
Levine, the owner of San Francisco Chocolate Factory, said he doesn’t expect to the tariffs announced Wednesday by President Donald Trump to directly affect his business because he buys American-made ingredients.
“Most of our chocolate does come from San Francisco, hence our name,” he said.
But he is experiencing dramatic price hikes for other key ingredients.
“I've never seen chocolate prices this high ever, like, you know, in the $20 or $30 range,” Levine said. “Whereas they used to be like, $10 to $15 range.”
The newly announced tariffs are unlikely to affect the price of sugar – but that’s because sugar tariffs are already very high, Beghin said.
“The price of sugar, my sense is not going to change dramatically in the U.S.,” he said.
The U.S. sugar program increases production costs for industries that use sugar, such as bakers and candymakers like Levine, Beghin said.
“And then consumers pay the price, right?” he said. “So you pay more for your candy; it's not a lot. You pay more for your sugar.”
Sugar only makes up a small share of your food budget – about $10 per person in the U.S., according to Beghin. But it does add up to a lot of money for U.S. sugar growers, he said, because that $10 is scaled by so many consumers.
The bottom line, he said, is that tariffs are taxes on consumers. And producers in the U.S. eventually start charging more for their American-made goods, Beghin said.
“The experience is that the domestic prices increase,” he said.
Phoenix chocolate maker ready to adapt
Levine sells a line of handmade chocolates, caramel apples, chocolate-dipped strawberries and chocolate frozen treats at his central Phoenix store and at festivals around Arizona.
He founded his business in Glendale 28 years and has experienced plenty of economic downturns since then. But his chocolate, he says, is recession-proof.
“Raising our prices ... may turn some people away, or they may buy less,” Levine said. “But you know, we adapt to that. We'll make smaller chocolates, then.”
His customers know his sweets are handmade chocolate that can’t be bought in stores, pointing to his peanut butter cups as an example.
“First of all, ours is like, oh, three times the size of what a regular peanut butter cup is,” he said. “And we have fresh peanut butter and ... that just doesn't happen, because they use kind of like this dried peanut butter with, like, confectioner sugar in it to make it all solid.”
The San Francisco Chocolate Factory sells more and more chocolate every year, Levine said.
“I eat chocolate every day for 28 years, and I've never had any health problems, either,” he said, laughing. “And I'm thin, so if you think chocolate makes you fat, think again.”
