President Trump’s new prices create more potential disturbances for restaurants

President Trump imposes more taxes on importation, this time on a huge gang of global business partners. | Image: Shutterstock.

President Trump announced on Wednesday a set of radical prices on countries around the world, preparing the way for a world trade war and adding a new set of disruptions for a restoration industry which already fights a trembling economic perspective.

The administration has announced a set of reciprocal prices on business partners at least 10%, with a few key exceptions for countries like Russia and Cuba which are already faced with large sanctions.

The new import taxes are designed to eliminate commercial imbalances between the United States and other countries, and Trump maintains that many other nations have stricter trade restrictions than the United States, the administration maintains that trade deficits have increased by more than 40% in the last five years, ultimately injuring interior manufacturing capacity. The prices vary according to the country, on the basis of individual commercial imbalances, and reach 50%.

But prices are import taxes on goods imported into the United States and are generally paid by companies that import these goods. These companies generally transmit these rates to their customers, which increases the cost of these goods.

For restaurants, which import a range of goods such as wine from France or Vietnam cuisine, the result adds a layer of cost uncertainty at a time when a large part of the industry strives to find consumption traffic.

“The application of new rates on this scale will create changes and disruptions that restaurant operators will have to navigate to keep their restaurants open,” said Michelle Korsmo, CEO of the National Restaurant Association, in a press release. “The biggest concerns for restaurant operators – from community restaurants to national brands – are that prices will increase food and packaging costs and add uncertainty to availability management, while increasing prices for consumers.”

The administration had already imposed prices, including a price of 25% on the goods of Canada and Mexico and 10% on China. The association estimated that these prices would cost $ 12 billion in the catering industry. Wednesday’s announcement is much wider and affects a much larger range of business partners.

The Texas Restaurant Association said that it followed the price changes and their potential impact on the restaurants of this state. “Although we support the strategic use of prices, the current uncertainty tax surrounding these policies exerts significant pressure on our industry,” the Texas Association said in a press release. “The increase in prices will increase food costs and further erase restaurants and consumers. This volatility threatens companies, jobs and culinary experiences on which Texans count and appreciate. ”

The announcement of Wednesday’s price has taken a tour of stock markets from around the world overnight. On Thursday, the Dow Jones industry plunged more than 1,000 points in prematurely trade.

There are increasing concerns that prices – and even the threat of prices – could plunge the economy into a recession. Consumer confidence plunged last month. The Atlanta office of the American federal reserve, on the other hand, estimates that the gross domestic product in the first quarter decreased by 3.7%. Economists are increasingly predicting a recession: JP Morgan Research and Goldman Sachs have increased their chances for a 40% and 35% recession, respectively.

The impact of prices on the economy already creates headaches for certain restaurants. CEC Entertainment, the parent company of Chuck E. Cheese, has struggled to find investors for an emission of $ 660 million bonds, in part because investors are frightened by the impact of tariffs on the economy and on consumer companies.

An additional economic uncertainty also comes, because a large part of the industry is struggling with a consumer who is more reluctant to dinner. Several restaurant chains have expressed their concern about the consumer’s state, in particular those with lower income. This triggered something from a price war because fast food offers and other push channels to put customers in the door.

Restaurants spend about 30% of their food and packaging income, so the taxation of prices could increase these costs. But we fear that restaurants do not have the pricing power to increase prices or, if they do, the result could remove customers.

“Restaurant operators know that consumers are very sensitive to costs and have maintained price increases in the menu to 30%, while their food costs have increased by 40% in the past five years,” Korsmo said. “Restaurant operators are counting on a stable offer of fresh ingredients all year round to provide menu items that their customers want and expect. Many restaurant operators obtain as many domestic ingredients as possible, but it is simply not possible for American farmers and breeders to produce the volumes necessary to support the demand of consumers. ”

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