CFP
China's Restaurant Sector Pays the Price in the U.S.-China Tariff Showdown
AsianFin -- As the U.S.-China trade conflict enters a new and intensified phase, the pain is spreading beyond ports and customs declarations — it's now showing up on dinner tables.
A series of tit-for-tat tariff escalations has quietly but steadily pushed up costs for key agricultural imports that underpin China's food supply chain, particularly in the restaurant and catering sectors. Some U.S. goods bound for China are now subject to cumulative tariffs as high as 245%.
On April 11, Beijing announced it would raise tariffs on certain U.S. imports to 125%, reaffirming its position that any further harm to China's trade interests would be met with firm retaliation.
While the rhetoric plays out in official statements, the real impact is rippling through China's food and beverage industry — starting from raw materials and ending at consumer menus.
Three major U.S. exports — soybeans, beef, and pork — are at the heart of the disruption. Each plays a critical role in the Chinese food economy.
Soybeans dominate China's grain imports, accounting for 66.7% of total volume and 76.4% of the import bill in 2024. They're processed into two core products: soybean oil (18%) and soybean meal (over 80%). The former is the country's most widely used cooking oil, while the latter is vital for livestock feed, making it a backbone of the pork and poultry sectors.
Although Brazil's bumper harvest has softened soybean meal prices, a sharp reduction in U.S. soybean imports could trigger a rebound. If prices jump back to 3,500 yuan/ton from the current 2,951 yuan/ton, feed costs could rise 15% — pushing up hog farming costs from 14.3 yuan/kg to around 16 yuan/kg. That may squeeze out smaller producers and eventually lead to higher meat prices across the board.
Beef is already showing signs of volatility. According to Meat Exchange data, imported beef prices have swung sharply, with single-day increases of up to 1,500 yuan per ton.
Pork, too, remains exposed. In 2024, China imported 408,000 tons of U.S. pork — 17.9% of its total pork imports. New tariffs are expected to significantly reduce that volume in 2025, raising concerns of a repeat of 2018, when pork prices surged during the earlier trade war.
Restaurant Chains Feel the Heat
Consumers are seeing the effects firsthand. At Sam's Club in China, U.S. beef short ribs have jumped from 290 yuan to 320 yuan per package — a 13.8% increase.
Restaurateurs are adjusting. A barbecue restaurant in Fujian, for instance, removed one of three signature U.S. beef options from a 139-yuan meal combo due to rising costs. Meanwhile, a beef supplier sourcing over 5 million yuan worth of product annually reported a 23.5% cost hike — from 34 yuan/kg to 42 yuan/kg.
Some Western-style restaurants and niche establishments, which rely heavily on imported ingredients to maintain their premium positioning, are especially vulnerable. One viral post claimed a chef at the Mandarin Oriental said Boston lobster prices had risen from 150 to 180 yuan per jin (500g), reflecting the broader import pressure.
"Not Using U.S. Goods" ≠ Safe from Impact
Even restaurants that avoid U.S. imports aren't immune. The global supply chain is tightly interlinked — soybean oil, chicken feed, flavorings, even cheese and spices often have U.S. ties, directly or indirectly.
"It's like iPhones," one observer noted. "You may think chip prices don't affect you, but once you're in the global supply chain, the cost ripples hit everyone."
Restaurants, already grappling with surging rents and labor shortages, now face a third mountain of rising food costs. According to the China Index Academy, nearly 70% of commercial streets in tier-one cities saw rising rent in early 2024, with over 50% of tier-two cities reporting the same trend.
Still, the tariff pressure could become a catalyst for change. Diversifying procurement away from single-country reliance is an immediate move. In the longer term, building resilient domestic supply chains may be the restaurant sector's best hedge against future shocks.
One success story: frozen French fries. Once reliant on U.S. imports, China has flipped the equation, with domestic production now accounting for 80% of the market. Local fries are now making their way into Western fast food, hotpot chains, and even grill joints.
Other restaurants are shifting menus toward locally sourced proteins like chicken, duck, and goose — less volatile and more sustainable under current conditions. Industry watchers predict these options could become the next culinary trend.
The crackdown on imported food may also boost regional Chinese cuisines and homegrown food culture. As consumer tastes shift and costs rise, domestic ingredients may get their moment in the spotlight.
Still, for many smaller restaurants, the immediate reality is grim: rising costs, thinner margins, and a shrinking buffer for error. But as the dust settles, those that adapt may emerge stronger — and more self-reliant — than ever before.
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