As of March 4, 2025, the United States has implemented new tariffs significantly impacting imports from Canada, Mexico, and China. These tariffs are particularly relevant for the foodservice industry, potentially affecting the cost and availability of key ingredients.

Which Goods Are Affected by the Tariffs?

A 25% tariff is now in effect on most imports from Canada and Mexico, and tariffs on Chinese imports have increased from 10% to 20%. For restaurants, this means higher costs for products such as avocados, certain meats, seafood, and imported beverages like tequila and Canadian whiskey. (WhiteHouse.gov)

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Key Exemptions Under USMCA (Effective Until April 2, 2025)

Fortunately, some agricultural products qualify for temporary exemptions under the United States-Mexico-Canada Agreement (USMCA). These exemptions, effective until April 2, 2025, include (USTR.gov):

• Dairy Products: Including milk, cheese, butter, yogurt, and cream.

• Poultry and Eggs: Increased quotas and reduced barriers.

• Peanuts and Peanut Products: Including processed peanut products.

• Sugar and Sugar-containing Products: Limited tariff-free access for sugar products.

These exemptions apply only to products meeting specific USMCA rules of origin criteria, ensuring they are produced within the member countries. Proper certification of compliance is required to benefit from these exemptions.

How Restaurants are Reacting

Restaurants across the country are adopting strategies to navigate these changes:

• Cost Absorption: Some restaurants temporarily absorb increased costs to maintain customer loyalty and competitive pricing.

• Menu Innovation: Many are shifting menus to highlight locally sourced ingredients, minimizing reliance on imported products subject to tariffs.

• Supplier Renegotiation: Restaurateurs actively negotiate with suppliers or seek alternative sourcing options to manage cost increases without compromising quality.

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What Restaurant Owners Should Do

• Stay Informed: Regularly monitor tariff developments and USMCA exemption updates.

• Review Menus and Suppliers: Assess your current supply chain, considering local alternatives or products covered by exemptions.

• Strategic Pricing: Consider incremental pricing or promotions adjustments to manage cost increases effectively.

• Advocate and Collaborate: Engage with industry groups to influence policy decisions and stay ahead of potential further changes.

Navigating these tariff changes can be challenging, restaurants can manage impacts effectively with strategic planning and timely action. If you need assistance managing your supply chain, optimizing menus, or developing effective pricing strategies, reach out to our expert restaurant consultants for guidance and support.

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