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Tariff Hikes Threaten Restaurant Costs
Mar 11, 2025
As the restaurant industry navigates an evolving economic landscape, new trade developments are already making waves.
In January, U.S. imports soared to a record high of $329.55 billion, up from $293.36 billion in December, as businesses rushed to bring in goods ahead of the anticipated tariffs. The U.S. trade deficit also spiked to an all-time high of $131.38 billion.
Key Import Increases Impacting the Industry
Several product categories saw significant import growth, including:
- Foods, feeds, and beverages: Up $834 million, driven by increased shipments of cocoa beans, wine, beer, and meat products.
- Industrial supplies and materials: Up $23.10 billion, largely due to a surge in finished metal shapes.
- Consumer goods: Up $6.02 billion, with notable spikes in pharmaceuticals and telecom equipment.
Restaurant Industry Concerns Over Tariffs
President Trump’s proposed tariffs—25% on imports from Canada and Mexico has been delayed until April 2, and 10% on imports from China, already in effect since February 4. Economic experts warn that these trade barriers could raise prices on key food items, packaging materials, and restaurant equipment.
The National Restaurant Association (NRA) has issued a formal warning that the tariffs could cost the industry up to $12.1 billion, resulting in an estimated 30% profit loss for independent restaurant operators. Key concerns include:
- Higher food costs: Increased prices for avocados, beef, pork, poultry, and canned goods due to tariffs on imports and rising production costs.
- Supply chain challenges: Many fresh produce items and restaurant equipment originate from Canada and Mexico, leaving operators with limited alternatives.
- Menu price adjustments: Restaurant operators may be forced to pass rising costs onto consumers or adjust portion sizes ("shrinkflation").
What’s Next?
With tariff uncertainty persisting, the National Restaurant Association is actively lobbying policymakers to exempt food and beverage products. Additionally, supply chain experts suggest that some businesses may relocate production to the U.S. or diversify suppliers to mitigate costs.
The Louisiana Restaurant Association (LRA) will continue to monitor the impact of these tariffs and work alongside industry partners to advocate for restaurant operators. We encourage members to stay informed and share their experiences with us as these policies unfold.
Stay tuned for further updates.