The Prague Post - In US capital, Trump tariffs bite into restaurant profits

EUR -
AED 4.293297
AFN 80.91457
ALL 97.787182
AMD 448.803483
ANG 2.092137
AOA 1072.008381
ARS 1473.86814
AUD 1.776114
AWG 2.107191
AZN 1.992006
BAM 1.954944
BBD 2.359867
BDT 142.117771
BGN 1.954944
BHD 0.440707
BIF 3482.375178
BMD 1.169038
BND 1.495545
BOB 8.093456
BRL 6.502078
BSD 1.168788
BTN 100.194128
BWP 15.604167
BYN 3.824825
BYR 22913.14706
BZD 2.347672
CAD 1.60129
CDF 3373.844424
CHF 0.930865
CLF 0.029161
CLP 1110.323824
CNY 8.380309
CNH 8.386416
COP 4691.84559
CRC 589.441902
CUC 1.169038
CUP 30.97951
CVE 110.21674
CZK 24.665189
DJF 208.128867
DKK 7.461795
DOP 70.379183
DZD 151.705573
EGP 57.855667
ERN 17.535572
ETB 161.021794
FJD 2.621276
FKP 0.865796
GBP 0.866082
GEL 3.16855
GGP 0.865796
GHS 12.154678
GIP 0.865796
GMD 83.590727
GNF 10140.559771
GTQ 8.978069
GYD 244.522931
HKD 9.175551
HNL 30.573613
HRK 7.533988
HTG 153.40283
HUF 399.5543
IDR 18972.787189
ILS 3.894218
IMP 0.865796
INR 100.333285
IQD 1531.029611
IRR 49231.122092
ISK 142.400984
JEP 0.865796
JMD 186.898163
JOD 0.828894
JPY 171.328427
KES 151.00388
KGS 102.232832
KHR 4685.948172
KMF 492.340851
KPW 1052.116012
KRW 1612.291055
KWD 0.357481
KYD 0.973974
KZT 610.66261
LAK 25187.970987
LBP 104720.046415
LKR 351.4761
LRD 234.337391
LSL 20.841074
LTL 3.451866
LVL 0.70714
LYD 6.314235
MAD 10.527091
MDL 19.787336
MGA 5177.732835
MKD 61.508068
MMK 2454.245682
MNT 4196.950222
MOP 9.450262
MRU 46.492642
MUR 53.144915
MVR 18.007558
MWK 2026.612611
MXN 21.771042
MYR 4.971339
MZN 74.772119
NAD 20.841074
NGN 1786.89858
NIO 43.011167
NOK 11.839321
NPR 160.310805
NZD 1.945479
OMR 0.4495
PAB 1.168788
PEN 4.144385
PGK 4.831884
PHP 66.037214
PKR 332.363469
PLN 4.253138
PYG 9058.033774
QAR 4.260834
RON 5.081579
RSD 117.098726
RUB 91.189371
RWF 1688.860502
SAR 4.384482
SBD 9.733981
SCR 16.480784
SDG 702.011685
SEK 11.176827
SGD 1.494854
SHP 0.91868
SLE 26.307644
SLL 24514.149043
SOS 667.907544
SRD 43.49699
STD 24196.728708
SVC 10.226522
SYP 15199.796755
SZL 20.847871
THB 37.929486
TJS 11.295954
TMT 4.103324
TND 3.419503
TOP 2.738009
TRY 46.93731
TTD 7.940523
TWD 34.1849
TZS 3029.973271
UAH 48.831018
UGX 4189.165697
USD 1.169038
UYU 47.259307
UZS 14766.534203
VES 133.584256
VND 30528.845862
VUV 139.77719
WST 3.204584
XAF 655.669903
XAG 0.030452
XAU 0.000348
XCD 3.159384
XDR 0.815443
XOF 655.669903
XPF 119.331742
YER 282.732293
ZAR 20.949587
ZMK 10522.750076
ZMW 27.056153
ZWL 376.429796
  • CMSC

    0.0900

    22.314

    +0.4%

  • CMSD

    0.0250

    22.285

    +0.11%

  • RBGPF

    0.0000

    69.04

    0%

  • SCS

    0.0400

    10.74

    +0.37%

  • RELX

    0.0300

    53

    +0.06%

  • RIO

    -0.1400

    59.33

    -0.24%

  • GSK

    0.1300

    41.45

    +0.31%

  • NGG

    0.2700

    71.48

    +0.38%

  • BP

    0.1750

    30.4

    +0.58%

  • BTI

    0.7150

    48.215

    +1.48%

  • BCC

    0.7900

    91.02

    +0.87%

  • JRI

    0.0200

    13.13

    +0.15%

  • VOD

    0.0100

    9.85

    +0.1%

  • BCE

    -0.0600

    22.445

    -0.27%

  • RYCEF

    0.1000

    12

    +0.83%

  • AZN

    -0.1200

    73.71

    -0.16%

In US capital, Trump tariffs bite into restaurant profits
In US capital, Trump tariffs bite into restaurant profits / Photo: Drew ANGERER - AFP

In US capital, Trump tariffs bite into restaurant profits

Brazilian coffee beans, French champagne and Chinese teas -- drinks are a profit driver for US restaurants, but higher import costs have eaten into margins and fed into consumer prices in the three months since President Donald Trump unveiled sweeping global tariffs.

Text size:

A stone's throw from the White House, a restaurant group that takes pride in dishing up fresh local meat and produce has found itself having to raise prices on its menus.

"The reality is, we have to pass along some of those to our guests," said John Filkins, corporate beverage director at Clyde's Restaurant Group.

"Could be anywhere from 50 cents to $1 on certain wines by the glass, or spirits, or some of our food menu items," he told AFP.

"We've seen huge increases in coffee and in teas, and we're beginning to see some of those increases in food, as well as paper products coming on through as well," he added.

Clyde's, which opened in the 1960s in Washington, has more than a dozen restaurants in and around the US capital.

One of them is The Hamilton in downtown Washington, where drinks prices have ticked up.

While management has tried to limit increases, Filkins said this has been tough.

Businesses have encountered snarled supply chains and higher costs since Trump imposed fresh tariffs after returning to the presidency in January.

In April, the president unleashed his widest-ranging salvo, a 10 percent duty on imports from most trading partners. This is expected to surge to higher levels for dozens of economies.

- 'Low cash, low margin' -

Leaders like Filkins are eyeing a deadline next Wednesday when the steeper tariffs are due to kick in.

These are customized to each partner, with the level for European Union products rising to 20 percent and that for Japanese goods jumping to 24 percent unless they strike deals to avert or lower the rates.

Filkins warned that the longer tariffs remain in place, the fewer small, independent distributors, importers and restaurants there might be.

"The hope is we don't see tariffs to the extent where we're seeing them any longer," he added.

"Restaurants are, at the end of the day, typically low cash, low margin," Filkins said.

A typical outfit probably runs "in the single digits in terms of profit margin," he noted.

This means that cutting out 10 percent to 15 percent of their profit for wine by the glass, for example, could prove a significant blow.

- 20-30% hikes -

Clyde's sources coffee beans from places like Brazil and Indonesia for its blends, while getting teas from India and China.

"Over the course of the last probably six months, we've seen about a 20 to 30 percent increase of that cost," Filkins said.

This is partly because suppliers and distributors are not only paying the 10 percent tariff but forking out more due to exchange rates.

Imports from China face a 30 percent tariff currently even though Washington and Beijing have temporarily lowered tit-for-tat levies on each other's goods.

Without a deal, products from Indonesia face a 32 percent duty come Wednesday, and the rate for India spikes to 26 percent.

"For liquor, beer and wine, most of the wine we import comes from the EU," Filkins said, noting the impact is biggest on products from France, Italy, Spain and Portugal so far.

Yet, his company is trying to hold off passing on additional costs entirely.

"Consumers are not comfortable spending more in the current climate," said Filkins.

The world's biggest economy has fared well after the Covid-19 pandemic, helped by a solid labor market that allowed consumers to keep spending.

But economic growth has slowed alongside hiring.

Economists are monitoring to see if tariffs feed more broadly into inflation this summer, and households become more selective with purchases.

With Trump's approach of announcing, adjusting and halting tariffs roiling financial markets and fueling uncertainty -- forcing businesses to put investments on hold -- Filkins hopes for an easing of levies.

"It's hard for all of us to forecast what's going to happen in the next eight days," said Filkins. "We can't base all of our decisions on speculation."

M.Soucek--TPP