On 2 April, named Liberation Day by President Trump, the US administration announced extensive business tariffs on goods imported to the US. Made up of a 10% universal tariff as well as so-called reciprocal tariffs, the levies vary greatly from market to market and, in an indication of the unpredictable times ahead, are likely to go up or down depending on the receiving country’s reaction.
Initially, China was currently facing an elevated tariff after implementing retaliatory tariffs, while other nations are in talks with the White House to reach a deal. Tariffs were announced to range from 10% on goods from the UK and 20% on the EU to 24% on Japan, 46% on Vietnam.
On April 9, President Trump announced a 90-day pause for those nations hit by higher US tariffs. At the time of writing, a universal 10% levy for all countries, aside from China, remains in place – while the 25% rate for all aluminium, steel, and cars entering the US is also still in place, for now. China has retaliated with tariffs of 84% on all US imports.
If and when the sweeping tariffs do happen, for the foodservice industry they will have an impact on several areas, from equipment manufacturers to the operators sourcing products.
As US companies try to get their heads around the medium- to longer-term scenario, for now it will likely be business as usual for those dealing with overseas manufacturers, for the simple reason that it is very hard to pivot to new equipment specs in the middle of a restaurant development.
For Charlie Souhrada, vice president, regulatory & technical affairs of the North American Association of Food Equipment Manufacturers (NAFEM), it is hard to predict exactly how hard this will hit the sector. “Setting the initial churn aside, it’s too soon to speculate how this latest round of tariffs will affect the US, let alone the global foodservice market,” he says.
However, FCSI Associate Jay Bandy, the president of Goliath Consulting in Georgia, expects to see a lot of people talking to US equipment manufacturers at the National Restaurant Association Show in Chicago in May. “They’ll be pivoting away from equipment made in other countries where possible,” he says.
Meanwhile, manufacturers will be in the position to negotiate on non-US equipment. “They don’t want to lose market share and customers in the short term and they’ll be working hard to mitigate the impact of the tariffs,” he adds.
From a UK perspective, John Cunningham, the chief executive of the Foodservice Equipment Association, expects a significant hit to business.
However, Cunningham notes that for most UK manufacturers, the main market is the EU, which makes companies less exposed than others and while no one wants to see tariffs, they are at least affecting most countries. “It means that the rest-of-the-world is at least experiencing the same challenges as we are,” he says. “This shared challenge around export trade might encourage all countries to look more seriously at alternative export markets and to search for growth in different economies which would be a good thing.”
Iain Munro, secretary general of The European Federation of Catering Equipment Manufacturers (EFCEM), which represents manufacturers of commercial kitchen equipment across Europe adds: “The US tariffs are a key area of concern and discussion within the EFCEM membership. Several major brands that have established themselves in the US market in recent years will undoubtedly feel the impact, particularly in terms of future growth plans,” he says.
“The EU Commission has recently initiated an information-gathering exercise to assess the industry-wide impact of tariffs on steel and aluminum, which directly affects catering equipment. While it’s still early to fully gauge the consequences, initial feedback has highlighted concerns about restricted access to the US market and an increased inflow of low-priced third-country products originally intended for the US,” adds Munro.
“We have an EFCEM Management Board meeting on 24th April, where the US tariffs will be discussed in more detail, particularly now that we have the full announcement from President Trump. Additionally, the EFCEM General Assembly in June – hosted by FEA in London – will include a Members Committee Meeting, where tariffs will again be on the agenda.”
Ingredients
Foodservice operators and restaurateurs will feel the knock-on effect too, as many ingredients in American restaurants are shipped in from overseas markets. In fact, according to the USDA, about 17% of the total US food supply is imported, and the implementation of these tariffs will significantly raise the cost of imported goods.
Operators will need to get inventive as some imported goods are hard to substitute. “If your menu is heavy with items such as Italian 00 flour, olive oil, cured meats, wine and avocados, it will be a scramble to find domestic alternatives,” says Bandy.
China, among the recipients with the higher levels of tariffs, import significant quantities, including fruits and vegetables, apple juice, garlic spices, tea and shrimp, to the US. For example, In 2023, fish accounted for over $1.3bn of the $450bn China exports to the US market.
Mexico has avoided punishing tariffs applied to food so far but provides a good illustration of the reliance on produce from overseas markets. The Central American country supplies about half the vegetables and 40% of fruit imports in the US – more than 80% of avocados on the US market originate from Mexico.
Best foot forward
So far, the UK government has dealt with the challenge in a calm way with no panic. That is the right approach, says Cunningham. “This is a time for cool heads and behind-the-scenes diplomacy,” he says.
However, he points to a potentially more unsettling scenario with no winners if other countries follow suit in a move towards protectionist policies, leading to a global trade crisis.
“So many of the world’s major economies are in a precarious state right now, the world is a dangerous and uncertain place and the temptation for countries to focus on what’s happening domestically is strong,” says Cunningham. “But economically we are better off as a global population if we trade successfully with each other and I hope that the current policy in the US doesn’t spawn similar approaches from other major economies.”
For now and on a practical level, NAFEM advises members in the US to closely evaluate supply chains to assess the potential duty impact based on the applicable country of origin and the respective duty rate. “In some cases, like Chinese-origin goods, overlapping tariff actions on imported commodities may stack on top of each other,” explains Souhrada. “US importers should ensure that information including tariff classification, valuation, country of origin, and duties paid is accurately declared to U.S. Customs and Border Protection.”
Bandy says foodservice professionals should start shopping for alternatives now. “Your suppliers and distributors will be expecting your call,” he says. “Be sure to lock in on futures and quantities to ensure supply later this year when everyone else catches on.”
While businesses seek clarity and a way through these challenges, the tone among partners is focused on business rather than politics, as Cunningham concludes.
“Ultimately Americans are friends and partners to the UK and whatever your political views, and whatever administration and policies are in effect on both sides, we will do our best to keep trading and maintain a positive relationship with the USA.”
Further details:
For advice, visit fea.org.uk, nafem.org and efcem.info.
Tina Nielsen
Details correct at the time of writing. Article updated on April 10.
