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Restaurant Industry Braces for Impact as Tariff Uncertainty Persists
Much like seasoned waiters adept at handling demanding patrons, the restaurant sector is navigating the complexities of fluctuating trade policies, particularly recent tariff reversals. These sudden shifts have left many in the food service industry reeling, prompting concerns and strategic adjustments across the board.
Navigating the Shifting Landscape of Import Tariffs
Following the announcement of impending tariffs, chefs across the nation pre-emptively contacted suppliers to stockpile imported goods, anticipating significant price hikes. However, a temporary reprieve arrived when a recently implemented array of tariffs, targeting 57 countries with rates from 11 to 51 percent, was unexpectedly put on hold. Instead, a flat 10 percent tariff on imports, excluding goods from China already facing a substantial 145 percent tariff, was declared for a three-month period. This abrupt change has injected considerable uncertainty into business planning, leaving many to wonder about the long-term implications beyond this temporary measure.
Restaurateurs Grapple with Pricing and Supply Chain Disruptions
For restaurant owners, these unpredictable tariff measures add considerable stress and complicate essential decisions, such as setting appropriate menu prices for dishes like dan-dan noodles. The fluctuating costs of imported ingredients create a challenging environment for maintaining stable prices and profitability.
Expert Guidance and Industry Concerns
The National Restaurant Association has engaged supply chain specialists to advise members on managing disruptions to the flow of crucial imported products, including seafood and vegetables. Restaurant proprietors, who initially crafted business models based on principles of free trade, are now questioning the viability of those plans amidst escalating global trade disputes where food commodities are being used strategically.
Thin Margins and Pricing Pressures
Sean Kennedy, Executive Vice President for Public Affairs at the National Restaurant Association, emphasized the delicate financial position of eateries, stating, “Restaurants operate with the slimmest profit margins of any Main Street business in America. These razor-thin margins leave us exceptionally vulnerable to dramatic fluctuations in food costs. Sustained tariffs eliminate any buffer for maintaining affordable menu prices.”
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Chef’s Perspective: Adapting to Tariff Volatility
Chef Jarrett Wrisley, owner of Shan restaurant in Montana, which specializes in Southwestern Chinese and Northern Thai cuisine, proactively ordered essential imported ingredients such as dark soy sauce, Zhenjiang vinegar, Sichuan peppercorns, and roasted sesame paste from China. Initially anticipating a 104 percent tariff, he now faces supplier uncertainty regarding the continued availability of these products.
While Shan sources domestic bison and pork, a significant portion of seasonings are imported from China and Thailand. Despite a temporary reprieve from a previously threatened 34 percent tariff, Wrisley anticipates price increases from suppliers and potential recipe adjustments, possibly incorporating American-made substitutes like Kikkoman soy sauce. However, for specialized ingredients like fermented fava-and-chile paste from Sichuan, domestic alternatives are simply unavailable.
The Uniqueness of Imported Ingredients
“This Sichuan paste undergoes a lengthy fermentation in amphorae and utilizes specific regional chiles,” Wrisley explained. “It’s impossible to replicate domestically. It’s doubtful the aim of these trade disputes is to stimulate domestic production of highly specialized Asian food components.”
Importers Overwhelmed by Demand and Uncertainty
Susie Kasem of ARJ Oregon, an importer based in Portland, reports being inundated with calls from restaurants reliant on her supply of Thai staples like sticky rice and fish sauce. The surge in orders, as chefs attempted to preemptively stock up, compelled her to implement order limits.
“My phone has been ringing non-stop,” Kasem stated, underscoring the industry-wide scramble and confusion caused by the tariff fluctuations. “I’m at a loss for how to adequately respond to everyone’s inquiries.”
Echoes of Past Policy Reversals
Restaurants procuring tequila or other Mexican goods experienced a sense of déjà vu with Wednesday’s abrupt policy shift. The White House initially indicated that the 10 percent across-the-board tariff would not apply to Mexico and Canada, shortly after Treasury Secretary Scott Bessent suggested otherwise. This mirrored previous instances where tariffs on Mexican goods were imposed and then rescinded within days, highlighting the unpredictable nature of trade policy decisions.
Long-Term Supply Chain Adjustments
Colorado-based chef Johnny Curiel, who owns four Mexican restaurants, experienced firsthand the disruptive effects of border delays in March, when trucks carrying essential ingredients were held up. To mitigate future supply vulnerabilities, Curiel recently invested in a substantial quantity of imported corn for tortillas and is exploring direct partnerships with Mexican chile and herb farmers—a move that, while benefiting his restaurants, will impact his established distributors.
“This benefits me, but not my distributors,” Curiel acknowledged, expressing the difficult trade-offs imposed by the current climate. “That weighs heavily on my conscience.”
Looking ahead, Curiel is collaborating with a farmer north of Boulder to cultivate heirloom Cónico corn, a project initiated after prior tariff threats against Mexico. Despite the current delay in these tariffs, Curiel views diversifying his supply chain as a proactive measure to enhance long-term planning and stability.
Industry Resilience Amidst Uncertainty
“It’s certainly positive that the tariffs are not currently being implemented,” Curiel commented. “However, the underlying uncertainty about future policy remains a persistent concern.”
This pervasive uncertainty was a recurring theme at a recent chefs’ conference in Philadelphia. Chef Erick Williams of Chicago offered a perspective of resilience, responding to colleagues’ anxieties about impending cost surges.
Drawing on Pandemic Lessons
“When I hear people express despair, I struggle to fully embrace that sentiment,” Williams reflected in a subsequent interview. “Having successfully adapted and persevered throughout the pandemic, I believe we possess the capacity to navigate the present challenges effectively.”
Williams emphasized that restaurants provide more than just sustenance; they cultivate environments fostering social interaction, idea exchange, and cultural immersion.
For many establishments, this cultural immersion is intrinsically linked to international culinary traditions. Imported ingredients, while not the sole offering, play a crucial role in attracting and engaging patrons. Policies that diminish the profitability of these ingredients pose a direct threat to the core appeal and viability of these businesses.
Cultural Gateway and Economic Concerns
Brooklyn’s Orion Bar leverages South Korean soju and instant ramen as introductory elements to broader Korean cultural exports like K-pop and K-dramas.
Chef and co-owner Irene Yoo expressed concerns about the potential impact of tariffs on Korean cultural dissemination, stating, “Interest in Korean culture is expanding, and tariffs are worrisome because they could impede this growth.” She noted that many patrons seek an authentic Korean experience, often inspired by K-dramas, driving sales of soju and imported beer, making alcohol price hikes particularly concerning.
Preserving Culinary Authenticity
Eric Sze, chef and co-owner of Taiwanese restaurants Wenwen and 886 in New York, conveyed relief at the temporary suspension of tariffs on essential Taiwanese condiments like sacha sauce and soy paste. These ingredients are fundamental to dishes like 886’s sacha black-pepper beef, which serve as cultural ambassadors, sharing the heritage of Sze and his business partner. “Food functions as the most accessible cultural ambassador,” he affirmed.
Italian Restaurants and Imported Staples
Roscioli NYC, the New York branch of a renowned Roman restaurant group, has voiced apprehension regarding the escalating costs of Italian wine, cheese, pasta, bottled sauces, and preserved vegetables—all vital to their operation.
The Indispensability of Global Ingredients
“Operating a restaurant without these imported products is practically inconceivable,” stated managing partner Mattia Moliterni. “We are committed to maintaining our culinary standards and offerings.”
Restaurants are now in a holding pattern, awaiting clarity on the extent of price increases for imported food and beverages under the newly implemented 10 percent tariffs. The looming possibility of more severe tariffs returning adds further uncertainty. These tariffs represent a significant disruption to American restaurant culture, which has flourished due to open trade policies that facilitated access to diverse global ingredients.
“This access has been invaluable for both chefs and consumers,” Montana chef Wrisley concluded. “Eliminating it in the name of domestic reindustrialization seems counterproductive.”