The National Restaurant Association said operators are assessing how they will be impacted, so they can manage pricing pressures and secure ingredients
It may be a while before we understand how President Trump’s tariffs on goods from Canada, Mexico, and China will impact the restaurant industry. What we know now coming out of the gate is the general Dow Jones U.S. Restaurant & Bars Index has actually responded with an uptick – a rare gain in a market that opened Monday morning riddled with red.
That’s not to say things are calm, however. Uncertainty almost never is.
In a statement issued Friday, a day before Trump issued the tariffs, National Restaurant Association president and chief executive officer Michelle Korsmo said, “In this rapidly changing landscape, small business restaurant operators are assessing how they will be impacted, so they can manage pricing pressures, secure key ingredients, and make potential menu adjustments — all while continuing to serve their communities.
“As the Trump Administration reevaluates trade policies, we are closely monitoring the impacts tariffs will have on food and beverage pricing, domestic sourcing options, and menu adaptation. We will continue to work with the administration to ensure that restaurant operators’ concerns are heard.”
The tariffs, including 25% for Canada, and 10% for China, begin Feb. 4. The U.S. and Mexico reached an agreement on Monday to delay the 25% tariff on Mexican imports for one month.
As this trade war unfolds, some concepts will likely be affected more than others. Avocados, for instance, are one of the top imports from Mexico and could disrupt Chipotle, Cava, El Pollo Loco, and plenty of others. According to Technomic Ignite data, avocados appear on more than 42% of all menus.
The National Restaurant Association analyzed potential impacts following Trump’s election in November based on what food and beverage products are imported most from each of the three markets.
From Canada, the top 10 food and beverage commodity imports from 2023 in order of volume included baked goods/pastries, rapeseed/mustard/colza oil, fresh or chilled beef, chocolate and cocoa-based foods, frozen prepared or preserved vegetables, crustaceans such as shrimp or crab, “other miscellaneous food preparations,” pork, fresh or chilled vegetables, fresh or chilled fish.
The total flow of commodity imports from Canada during 2023 was $418.6 billion.
The top 10 food and beverage imports from Mexico that year included beer, alcoholic beverages, fresh fruits, dates/figs/pineapples/avocados, fresh or chilled vegetables, fresh or chilled tomatoes, baked goods, fresh or chilled beef, sugar confections, and preserved fruits and nuts.
The total flow of commodity imports coming from Mexico in 2023 was $475.2 billion.
Finally, the top 10 food and beverage imports from China in 2023 were fish fillets and meat, modified fats and oils, preserved fruits and nuts, vegetable extracts, miscellaneous food preparations, vegetable saps/extracts, prepared vegetables, sauces/condiments/mustard flour, preserved crustaceans and mollusks, and sugar confectionary.
The total flow of commodity imports coming from China in 2023 was $426.9 billion.
It’s worth noting, however, that these tariffs will likely impact more than just food and beverage imports. Higher livestock feed, stainless steel equipment, and lumber costs for construction projects are among the ripple effects predicted from this policy. Economists anticipate the auto industry, chip makers, household and leisure goods, green energy, and materials like metals, wood, and glass, will be affected most by the tariffs.
As such, U.S. Chamber of Commerce senior vice president and head of international John Murphy released a statement saying, “The president is right to focus on major problems like our broken border and the scourge of fentanyl, but the imposition of tariffs under IEEPA (International Emergency Economic Powers Act) is unprecedented, won’t solve these problems, and will only raise prices for American families and upend supply chains.”
The nonpartisan Tax Foundation finds that the tariffs could cost the average American household an extra $830 a year, while the Budget Lab at Yale University estimates they will cost the average American household $1,000 to $1,200 in annual purchasing power. American consumers have been managing inflationary pressures for the past several years and arguably reached their breaking point in 2024 as restaurant traffic turned negative across segments.
We will be following this story through the current round of earnings calls and beyond, so stay tuned.
Contact Alicia Kelso at [email protected]
