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2020 Was an Awful Year for Restaurants, But Reversing Tariffs Could Help
News Source/Courtesy: www.triplepundit.com

More than 110,000 U.S. restaurants closed over the past year – and as shutdowns resumed, well over 10,000 of them shuttered over the last three months of 2020 alone. Across the country, the heartbreak continues – many of these were beloved local institutions, and many had made investments in tents and other equipment to adapt to the new reality of doing business during a pandemic.

And as many restaurants and bars were shut down to counter the COVID-19 surge, few policies were in place to help these small business owners and their employees get through this crisis. For owners, the only flaw in their business decisions was to not do the impossible – have a completely pandemic-proof plan.

Nevertheless, even though this “dark winter” makes us wonder if there’s any light at the end of this tunnel, leading restaurateurs say one signature can give the restaurant industry a much-needed lift.

The (part of) a solution? Chefs and restaurant owners are saying to start with the 25 percent tariffs on many European food and alcohol products, which the Trump administration imposed in October of last year.

At a first glance, those products may seem like a small part of U.S. restaurants’ (and that of bars) menus. But then look at the list of products, which includes cheese, frozen fruit, meat products such as ham, olives, whisky and wine. Then add the fact that restaurants that use these products must make the stark choice to either pass on the costs to their customers or simply absorb the prices – the latter of which is non-starter in a sector with very thin profit margins.

“Frustratingly, restaurants have been caught in the crossfire of a much larger trade war. The goal of the tariffs was to hit back at the European Union in a long-running feud between U.S. aircraft giant Boeing and its E.U.-based rival Airbus,” wrote Kwame Onwuachi and Alice Waters in a recent Washington Post op-ed. “Spanish wine may have nothing to do with Boeing, but the Trump administration thought it could bring Europe to its knees over aircraft subsidies by taxing food exports.”

Any appeals the restaurant industry has made to the White House have fallen on deaf ears; in fact, the outgoing administration is lengthening the list of products subject to these tariffs, as part of its long dispute with the European Union over its subsidies for its aviation industry.

Such a move may score points with one’s political base, but it’s been a gut punch to small businesses on both sides of the pond. One business association pointed out how a 25 percent increase in cost can hurt countless small businesses, while Europe’s aircraft sector – the core of this ongoing spit-spat – was slapped with only a 10 percent tariff. Another group suggested at least 13,000 jobs disappeared as the tariffs were first imposed, hardly a small number at a time when jobs are scarce.

The effects not only hit restaurants and their employees. Yet another restaurateur noted that smaller food distribution companies could suffer – while small, family-owned restaurants would not benefit from purchasing from larger suppliers that only offer discounted prices to large restaurant chains.

It will take a long time since the two million-plus jobs that the restaurant sector lost during the past year will ever come back. Nevertheless, Onwuachi and Waters say that with a “stroke of a pen,” President-elect Joe Biden could reverse those tariffs and give these restaurants and bars a much-needed break.

One coalition is keen on amplifying that call to action. The Coalition to Stop Restaurant Tariffs, which just emerged last month, is urging the incoming White House to nix those tariffs soon – and keep these small businesses out of the line of fire in what has been a 16-year-long tussle between the U.S. and European Union.

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