Not so fast with those supplies. | Photo: Shutterstock
Welcome to Government Watch, a Restaurant Business column focused on politics, regulation, legislation, and other governmental issues of relevance to the restaurant industry. This week’s edition looks at how the tariffs promised by President-elect Donald Trump on virtually all imports from Mexico and Canada could affect food costs. There’s also a look at why Massachusetts restaurants are unlikely to get approval for in-store gaming kiosks.
Donald Trump’s new plan for cutting the flow of fentanyl and undocumented migrants into the United States could light a rocket under restaurants’ food costs.
The president-elect has threatened to impose a 25% tariff on all imports from Mexico until officials there stop the influx of the deadly drug and block the illegal entry of asylum seekers. The upcharge would apply to such imported restaurant staples as avocados, tequila and Mexican beer.
Trump said he’ll levy the same tariff on all imports from Canada, a major source of grains, dairy products and the pea protein used in many plant-based meat substitutes.
The U.S. conducts more trade with Mexico and Canada than it does with any other nations. About 30% of the United States’ international commerce is believed to be conducted with the two countries.
The president-elect said throughout his campaign that he intends to impose steep tariffs on Chinese imports. In his speeches, he’s said the surcharges could run as high as 300% on some goods. On Monday, Trump pledged to hike the surcharges by another 10% until China disrupts shipments of fentanyl to the U.S. and Mexico, where the drug is often used to boost the potency of drugs subsequently smuggled across the nation’s northern border.
The Republican said he intends to impose the surcharges on day one of his administration and keep them in place until the flow of fentanyl stops. He also set an obligation for Mexico and Canada to stop undocumented migrants from crossing into the U.S.
The move would be a violation of free-trade agreements with the United States’ neighbors to the North and South. Trump said he would impose the tariffs through an executive order, thereby averting any involvement of Congress.
Trump has repeatedly pledged to seal the United States’ border with Mexico and deport all immigrants who are in the U.S. illegally, a group that some have estimated to be as large as 12 million.
Opponents have warned that the deportation in particular would raise domestic food prices by leaving fewer migrant workers available to pick crops and work in food processing facilities, significantly cutting supplies.
A tariff on Canadian imports could also raise restaurants’ construction costs. The U.S.’s northern neighbor is a major supplier of wood and concrete.
Trump aired the new twist in his border defense plan via Truth Social, the social media platform he controls. He stressed that the actions would be taken on the day of his inauguration, Jan. 20.
The day promises to be a very busy one for the incoming chief executive. He’s also promised to use his first 24 hours in office to begin the roundup of undocumented migrants, seal the border and halt the federal taxation of tips as income.
Massachusetts restaurants get a red light on gaming
A plan to permit the installation of sports betting kiosks in Massachusetts restaurants is unlikely to move forward after research showed the payoff for the industry would be negligible.
A feasibility study found that both would-be hosts and their guests favored installation of the devices, which resemble the kiosks that dispense lottery tickets. Nor did it indicate that the kiosks would foster more gaming addictions.
The problem, it concluded, was the effort not being worth the return.
The report cited the experiences of restaurateurs in Ohio, a market with similarities to Massachusetts. Operators there that installed sports-betting kiosks took in an average of just $225 annually from the devices, according to the collected data. That’s off a base of more than $7.65 billion in total wagers last year.
“The regulatory costs exceeded the revenue from the kiosks,” observed the report, which was drafted for the Massachusetts Gaming Commission by a third party, Spectrum Gaming Group.
The study found that restaurant guests may want to gamble on sports events during their visits, but can easily do so via their phones; they don’t need a free-standing kiosk to place their wagers.
Kiosk sports betting is a relatively new phenomenon, and is currently permitted only in Montana, Ohio and Washington, D.C. Far more jurisdictions have allowed consumers to bet on games via their smartphones.
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