Higher import costs linked to recently imposed tariffs are adding new challenges for restaurants in the U.S. capital, with businesses reporting slimmer margins and price adjustments on popular menu items.
Imported beverages such as Brazilian coffee, French champagne, and specialty teas have seen notable price increases since sweeping tariffs were announced earlier this year. Restaurants say they are struggling to absorb the costs without passing them along to customers.
“The reality is, we have to pass along some of those to our guests,” said John Filkins, corporate beverage director at Clyde’s Restaurant Group, which operates more than a dozen restaurants in and around Washington, D.C.
Filkins noted that prices for certain wines by the glass, spirits, and select food items have risen by 50 cents to a dollar in recent months. The company has also seen cost increases in paper products and ingredients, alongside persistent supply chain delays.
Many restaurant operators are now watching closely as a new tariff deadline approaches. The current 10% tariff on imports from most trading partners is set to increase on dozens of economies if no agreements are reached by next week. Tariffs on European Union goods could rise to 20% while rates on Japanese products could reach 24%.
“For liquor, beer and wine, most of the wine we import comes from the EU,” Filkins explained, adding that French, Italian, Spanish, and Portuguese wines are among the most impacted.
The industry is particularly concerned about the cumulative impact on smaller, independent restaurants and distributors that often operate on tight margins. “The hope is we don’t see tariffs to the extent where we’re seeing them any longer,” Filkins said.
In addition to the core tariff rates, some suppliers face higher overall costs due to currency fluctuations. Certain products from Asia are already subject to tariffs of up to 30%, with rates for goods from Indonesia and India set to climb to 32% and 26% respectively if no new trade arrangements are finalized.
While restaurants are trying to limit price increases to maintain customer spending, they acknowledge that the rising costs may eventually reach consumers more broadly, especially if tariffs remain in place through the summer months.
Some economists expect that higher import duties could add to inflationary pressures, as restaurants and retailers balance higher supply costs with consumer price sensitivity.
“It’s hard for all of us to forecast what’s going to happen in the next eight days,” Filkins said. “We can’t base all of our decisions on speculation.”
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