Trump's Proposed Tariffs Threaten $12 Billion Hit to U.S. Restaurant Industry
The National Restaurant Association warns that a 25% tariff on food and beverage imports from Mexico and Canada could force higher menu prices and strain already thin profit margins.
- The National Restaurant Association estimates that the proposed 25% tariffs could cost the U.S. restaurant industry over $12 billion, significantly impacting small operators with slim profit margins of 3% to 5%.
- The tariffs would likely lead to higher menu prices, passing costs onto consumers and making dining out more expensive, according to the association's letter to President Trump.
- The association argues that U.S. climate and growing conditions cannot sustain year-round production of many food products, making imports from Canada and Mexico essential for the industry.
- Quick service restaurants (QSRs) like McDonald’s may be less affected due to their ability to leverage supplier relationships and adjust sourcing strategies, though some menu items could face temporary price increases.
- The broader economic impact of the tariffs could include reduced consumer spending power and increased concerns about price hikes, with consumer sentiment already declining by 5% in February.
Benzinga 
PYMNTS 