The National Restaurant Association sent a letter to President Donald Trump, warning that tariff increases could cost the industry $12 billion, as Bloomberg reported.
The letter reportedly said that restaurants would have to raise prices, saying that operators saw typical margins in the 3% to 5% range.
“We urge you to exempt food and beverage products to minimize the impact on restaurant owners and consumers,” the letter reportedly said. “This will help keep menu prices stable.” The report did not say whether the claimed $12 billion would be an annual loss or something accumulated over time.
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The figure is based on an assumption of 25% tariffs on food and beverage products coming from Mexico and Canada.
The NRA also said that food and beverage products aren’t significant factors in trade deficits.
“For many food products, the appropriate climate and growing conditions do not exist in the US year-round to produce the quantities needed for our businesses,” the letter, signed by Chief Executive Officer Michelle Korsmo, said, according to Bloomberg.
Earlier this month, the NRA separately wrote in its 2025 State of the Restaurant Industry report, “Opportunity and cautious optimism will drive restaurant industry growth in 2025.” The organization forecasted $1.5 trillion in sales and an addition of 200,000 new net jobs this year, reaching 15.9 million. At that level of sales, the loss would be 0.8% of revenue, presumably bringing typical margins to 2.2% to 4.2%.
“The fundamentals of the restaurant industry are strong, and operators are optimistic about the year ahead,” Korsmo said in prepared remarks. “Industry sales are expected grow more than four percent this year, and employment should reach nearly 16 million jobs. That growth will come from restaurant operators finding the balance of value and experience for consumers, and innovating breakthrough efficiency in their operations.”
Last year in its 2024 State of the Restaurant Industry report, the NRA expected $1.1 trillion in sales in 2024. If both forecasts were accurate, that would be a projection of a 26.7% increase in sales and employment of 15.7 million.
In the latest update to a 2022 document, the NRA also discussed inflation as “straining restaurant operations.” Food costs over the last four years have risen 29%, the organization claimed, with labor costs climbing 31%. Average menu prices were up 27.2% between February 2022 and June 2024. Food and labor costs account for about a third of sales.
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