Are you curious about where we are in the on-again, off-again world of tariffs and how they affect food prices and restaurants? I almost hesitate to write this because it may differ in an hour or two. However, Steve Taylor, the senior vice president of business development for Emerging Concepts, put together some interesting numbers that I couldn’t leave on the shelf.
So, as of right now, May 6, 2025, at 8:31 am PST, this is where we stand in the land of taxes our government is levying on goods entering our country from other nations.
The Current Tariffs…Maybe
Most of the tariffs the government announced in April are on hold for 90 days. The exception is China, with tariffs as high as 145%. China replied in kind with 125% tariffs on products from the U.S.
According to CBS News, the effects are already making an impact. At the Port of Los Angeles, shipments from Asia were down 10% compared to last year. The Port of Los Angeles and Long Beach receive about 40% of Asia’s imports. The executive director of the Port of Angeles, Eugene Seroka, expects arrivals to drop by 35% in the coming weeks.
What also remains is a 10% baseline tariff on almost all imports from all countries.
Let’s not forget Canada and Mexico, our neighbors. While the 25% blanket tariff on both countries was suspended after they agreed to stem the flow of illegal immigration and fentanyl into the U.S., the 25% tariff remains for imported goods not compliant with the United States-Mexico-Canada free trade agreement that went into effect during Trump’s first term.
In retaliation, Canada imposed about $21 billion of tariffs on American orange juice, whiskey, peanut butter, appliances, and paper products, according to ABC News.
Treasury Secretary Scott Bessent said new trade deals are in the works, with the U.S. in talks with 17 of its 18 key trading partners. The exception? China. According to Bloomberg, U.S.-China trade talks are now set to start later this week. Also, according to Bloomberg, if U.S. trade negotiations fail with the European Union, they are ready to impose tariffs on about $113 billion of U.S. goods.
So, what does this mean to us mere mortals? Supply chain shortages and higher prices.
Trump is also considering a 100% tariff on foreign-made movies. Media companies such as Walt Disney, Universal Pictures, and Netflix film overseas.
Trump and Carney Face-to-Face
Today, May 6, Trump is meeting with Canadian Prime Minister Mark Carney, who won last week’s election on a platform dominated by anti-Trump rhetoric. As our second biggest trading partner and, at one time, one of our closest allies, the outcome of this meeting is significant.
It seems that, thus far, Trump has discussed Canada becoming the 51st state, and Carney has replied that Canada is not for sale. Good talk.
The Effect of the 10% Tariff
So, will the baseline 10% tariff affect restaurants and food prices? USA Today quoted Thomas Gremillion, director of food policy at The Consumer Federation of America, “The 10% ‘default’ tariffs alone represent a truly historic federal tax increase, maybe the largest in my lifetime, with a highly regressive impact.”
About 15% of our food supply comes from abroad. This includes 94% seafood, 55% fresh fruit, and 32% fresh vegetables. Bananas and coffee are almost exclusively imported. The majority of olive oil also comes from Europe.
In addition to food, construction materials, equipment, and furnishings may also be affected.
According to Restaurant Dive, Carlin Karr, wine and beverage director of the Frasca Hospitality Group, believes imported Chianti Classico, Pinot Grigio, and Prosecco may prove challenging, as well as artisanal wines from small independent distributors. However, the previous 18 months of soft liquor and wine sales mean an abundance of U.S. inventory, limiting the impact for now.
According to Taylor, if talks fail and threatened tariffs go through, potential increases include the following:
- Champagne, Scotch whisky; EU 20% tariff
- European wine (French, Italian, Spanish); potential 200% tariff
- Canadian Beef: 25% tariff
- Coffee and chocolate beans; Latin America 10% tariff (increase 5-15%)
- Sichuan peppercorns – staple Chinese cuisine; China 145% tariff
- Citrus fruit: 10-30%
- Avocados: 5-15%
- Wheat and corn imports: 5-15%
- Imported sugars: 10-20%
- Meat and pork: 10-30%, depending on the source country
- Cheese and milk: 5-25%
- Seafood: 10-20%
Looking for Substitutions
Small, independent restaurants are particularly vulnerable. In this environment, it is essential to keep a wary eye on costs and respond accordingly. Some ways restaurants address uncertainty include frequent menu and recipe changes, diversifying suppliers, researching local products, considering alternative sourcing, and stocking up on imports.
It’s also important to keep an ongoing conversation with suppliers to catch trends before they have a direct impact. Enhanced inventory management and optimizing operational efficiencies can also help mitigate the increasing costs of tariffs.
By implementing these strategies, restaurant companies can better navigate the challenges posed by current and maybe-someday tariffs and maintain their competitive edge in the market.
