Articles
May 14, 2025
Uncertainty looms as operators await tariffs’ future
Commodities expert says flexibility in sourcing, plus menu re-engineering where possible, are good practices to follow.
Restaurants rely on China for many of their key inputs, including food ingredients, plastic packaging and utensils.
Uncertainty on tariffs continues to loom, despite a new agreement to reduce U.S. levies on Chinese goods to 30% during the next 90 days. As part of the deal, Chinese levies on American goods would drop to 10%.
Canada and Mexico have been largely exempted from the imposition of tariffs, however, the 30% tariff on Chinese goods will create challenges for restaurant operators to handle, industry experts contend.
Restaurants rely on China for many of their key inputs, including food ingredients, plastic packaging and utensils, and equipment. The impact of the tariffs on goods from China and other countries will lead to increased costs and supply chain disruptions, says Bill Lapp, president of Omaha, Neb.-based Advanced Economic Solutions.
“The data show limited tariff impacts thus far, and any dramatic affects still lie ahead,” the commodities analyst says.
Lapp advises operators, especially smaller and independent ones, to continue looking for ways to mitigate the impacts of higher pricing and possible shortages by:
• Closely managing supply chains
• Finding alternative sourcing options
• Re-engineering menus to include more affordable ingredients
“Watch your inventories closely and maintain a favorable relationship with your suppliers,” he says. “Given the tariff uncertainty, it’s probably a good idea to investigate other possible sources for supplies and ingredients that help maintain smooth operations.
“Dynamic changes at restaurants and retail operations still remain,” Lapp continues, “and business operators will have to be even more creative and innovative to deal with those challenges.”
Canada and Mexico have been largely exempted from the imposition of tariffs, however, the 30% tariff on Chinese goods will create challenges for restaurant operators to handle, industry experts contend.
Restaurants rely on China for many of their key inputs, including food ingredients, plastic packaging and utensils, and equipment. The impact of the tariffs on goods from China and other countries will lead to increased costs and supply chain disruptions, says Bill Lapp, president of Omaha, Neb.-based Advanced Economic Solutions.
“The data show limited tariff impacts thus far, and any dramatic affects still lie ahead,” the commodities analyst says.
Higher prices remain on the menu
A 10% base global tariff is in place through early July, after which a more challenging schedule could be applied--21% for fresh tomatoes imported from Mexico; a tariff of more than 40% on shrimp from Vietnam; and coffee products from around the world. A return to these higher rates could pressure operator margins due to the increased food costs.Lapp advises operators, especially smaller and independent ones, to continue looking for ways to mitigate the impacts of higher pricing and possible shortages by:
• Closely managing supply chains
• Finding alternative sourcing options
• Re-engineering menus to include more affordable ingredients
“Watch your inventories closely and maintain a favorable relationship with your suppliers,” he says. “Given the tariff uncertainty, it’s probably a good idea to investigate other possible sources for supplies and ingredients that help maintain smooth operations.
“Dynamic changes at restaurants and retail operations still remain,” Lapp continues, “and business operators will have to be even more creative and innovative to deal with those challenges.”
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