No industry is immune to politics and the restaurant industry is, unfortunately, caught in global economic conflict that could make it even tougher to make ends meet. The political turmoil that has impacted the global free market could spell bad news for restaurants across the country as food prices look poised to see a sharp increase. So as if it wasn’t already hard enough to survive in the land of ever increasing rent and overregulation, it may get even harder mainly due to federal trade tariffs.
A quick rundown of what has happened and why this could mean price increases for eateries around the country. Earlier this year, President Trump announced that he would begin imposing tariffs on steel and aluminum that are being imported to the United States as well as certain types of machinery from Canada, Mexico, the European Union and China. In response, these nations announced that they would begin enacting tariffs on goods the US is exporting to these regions. Organizations like the National Association of Manufacturers warn that this escalating trade war will bring significant financial hurdles and mean higher prices for many goods and services.
One sector that is expected to be hit the hardest by these tariffs is the American agriculture industry. China represents one of the largest customers for America and has already begun taxing the importation of 128 American products into their country. These products include nuts, wine, fresh and dried fruits and pork just to name a few. With these tariffs as high as 25% on some of these products, American farmers are going to see a significant hit to their bottom line.
The easiest way for these farmers to survive is to find ways to make up this lost income at home since exporting will no longer be as lucrative as it once was. This means higher prices for the goods here in the United States. Restaurants and bars will almost certainly see a rise in the cost for their food products. The restaurant industry already survives on super thin profit margins and operations here in New York City are expensive. This rise in costs could spell real trouble for those restaurants who aren’t already taking active steps to mitigate this problem.
While there is no magic bullet that will solve all the problems that come with higher food prices there are some things restaurants can do to help save some of those much needed nickels and dimes.
• The first is to take a hard look at what you are currently buying and trim the fat. You may need to think long and hard about that extra crate of produce and if there are items that you might be able to get by without.
• The second option, which goes hand in hand with the first, is to alter your menu to utilize items more in season. In season fruits and vegetables tend to be cheaper due to their abundance, we encourage eateries to take advantage of that and use these less expensive options when possible.
With any restaurant operation it is important to be proactive when faced with the problem. Yes these tariffs may put a strain on your business. Acting quickly and thinking outside the box when it comes to your food ordering and menu planning might just keep you ahead of the curve in this situation. If you have any questions on the tariffs or anything else related to your business, the New York State Restaurant Association is here to help at 800.452.5212.
