Is The Trade War Hurting Restaurants?

American businesses have been bracing themselves for the unpredictable effects of President Trump’s escalating trade war with China all summer, but the affects of the newly imposed tariffs are only just starting to reveal themselves.

In an article published Wednesday, QSR Magazine investigated how the trade war is affecting the restaurant industry in particular. Quoting industry analysts and franchise executives, the article depicts a dark cloud hanging over the industry. While most restaurants are not yet feeling the sting of increase higher taxes on imported goods, they are expecting to soon.

“If the supply becomes more expensive, that’s a problem for restaurants,” said Alex Suskind, an industry researched at Cornell University’s School of Hotel Administration. “If you think about the restaurant industry, we’re a year-round business. There aren’t farming communities that support everything we do year-round. So we rely on external producers to supply the industry.”

The trade war is particularly worrying for restaurants serving seafood, which has been the target of some of the conflicts most substantial tariffs.

“A few high-end products like king crab may be able to absorb [the cost of increased tariffs], but a lot of products won’t,” said Alexa Tonkovich, Executive Director of the Alaska Seafood Marketing Institute. “If that is the case, it is likely some companies would send products they were promoting in China into another market like Japan, the U.S., or Europe. It can sometimes create an oversupply market by market.”

More than by the tariffs themselves, many restaurant owners are seemingly spooked by the uncertainty. The future of the trade war has not gotten any clearer this fall, and for the time being, many restaurants will have to treat that uncertainty as the new normal.

Read the full article at qsrmagazine.com.