The recent announcement of sweeping tariffs by President Trump is causing significant concern within the food and beverage industry, particularly for small business owners in Las Vegas. Many have already faced a 50 percent increase in wholesale prices this year but have yet to pass these costs onto customers. However, the new tariffs may force a change in this approach.
The tariffs include a baseline 10 percent on all imported goods, with higher rates for certain countries, notably 34 percent on China and varying rates on other major trading partners. These measures are part of the administration’s strategy to address what it calls an economic emergency, aiming to encourage domestic manufacturing. However, industry experts and business owners are apprehensive about the resulting price hikes.
The Nevada Restaurant Association predicts food prices could rise by 30 to 60 percent due to these tariffs, with many already experiencing increases. John Ianucci, CEO of Mas Mex, highlighted the challenges for Mexican restaurants, which rely heavily on imports like tequila and avocados from Mexico. He notes that while beef can be sourced domestically, it’s often more expensive than imports from Canada and Mexico.
Businesses are responding by cutting unnecessary expenditures and being cautious with expansions. The restaurant association is advising members to stock up on goods before tariffs take effect, as profit margins are already thin, typically between 3 to 5 percent. Despite their reluctance, many restaurant owners may ultimately need to pass these costs onto consumers to sustain their operations.