Juanny Romero has already seen wholesale coffee prices jump close to 50 percent so far this year.
“We haven’t passed on any of that price increase to our customers yet,” said the owner of Mothership Coffee Roasters, a Las Vegas coffee chain and roaster, with five locations. “We’ve just been eating it.”
But she may not be able to do that for much longer.
After President Donald Trump announced sweeping tariffs affecting almost every industry, the food and beverage industry in particular is bracing for impact.
And the Nevada Restaurant Association says restaurant owners are expecting food prices to go up by as much as 30 to 60 percent because of the tariffs; many are already seeing price increases.
Trump announced Wednesday a 10 percent baseline tariff on all imported goods and higher tariffs on multiple other trading partners, including 34 percent on China, 26 percent on India, 25 percent on South Korea, 24 percent on Japan and 20 percent on the European Union, which consists of 27 nations, largest being Germany and France.
The 10 percent tariff will go into affect Saturday, with the heftier tariffs taking affect Wednesday. Canada and Mexico will not be affected by the newly announced tariffs but will still be subject to the 25 percent tariff Trump imposed in March.
Being dubbed by the White House as “Liberation Day,” the tariffs are the latest move from the White House in response to what Trump calls an economic emergency. Most recently, Trump announced a 25 percent tariff on automobiles and auto parts made outside of the United States, which went into affect on April 2 and collection started on April 3.
Mothership sources coffee from every continent, except for Antarctica. And with profit margins continuing to thin, Romero said she has had to move different functions in-house, such as bookkeeping and marketing, in order to not pass the price increases along to customers. She said many coffee shop owners are afraid of raising prices.
“It’s almost a game of ‘who’s going to increase their price first?’” said Romero. “No one wants to increase their price first because they’re afraid that they’re gonna get penalized by the public.”
Tariffs ‘hot topic’
While the tariffs are being imposed in the hopes to spur domestic manufacturing and generate economic prosperity, many say it will cause a slurry of price increases.
Where can you buy tequila from America? According to John Ianucci, you can’t.
Ianucci, of Las Vegas, is the CEO of Mas Mex, which operates restaurants in Texas, and member of the Nevada Restaurant Association, said nearly all of the food his company buys comes from outside the United States, nor can they get it domestically even if they wanted to.
“I can buy beef in America, but I can’t buy tequila in America,” said Ianucci, who typically buys beef from Canada and Mexico. “I’m very concerned about what that’s going to look like.”
“If I buy beef, for example, from a supplier in America versus Canada, I’m gonna pay, you know, $20 to $30 a pound (already higher than beef from Canada), which is significantly gonna add up,” said Ianucci.
Because of Mexican restaurants’ heavy reliance on imports, Ianucci’s company is focusing heavily on cutting unnecessary spending and cutting back on large expenditures in order to keep costs down for consumers.
“We’ve slowed down on travel, we’ve slowed down on potential expansion conversations,” said Ianucci. “We’re cautiously being optimistic about what’s ahead of us, but we’re being very careful in what we’re doing day to day in preparation for what’s to come.”
Low profit margins
According to Peter Saba, government affairs manager for the Nevada Restaurant Association, running a Mexican restaurant, in light of the tariff announcements, is a tough business.
“Mexican restaurants are very popular in the state of Nevada,” said Saba.
Saba said the tariffs have been a “hot topic” for members since Trump’s election, with many reaching out post-announcement.
“Avocados and tequila really only grow, or properly grow, in Mexico all year round,” he said. “Those are already dealing with inflation. Prices have been up the past couple years, and now adding this on top of it, they (restaurant owners) are very worried about that.”
Other goods, such as rices, can also only be sourced from other countries. The restaurant association has been advising customers to stock up on goods as soon as possible before the tariffs go into effect.
“Restaurants already operate on such a very low profit margin, it’s 3 to 5 percent,” said Saba. “So definitely, it’s gonna have to, unfortunately, come to the consumer as much as restaurant owners or operators don’t want to. A lot of them are willing to absorb those costs on their own.”
For distributors, some say prices have increased “insanely,” for such goods as beef, pork, avocados and garlic, according to Desert Gold Food Company, blaming the tariffs for rising costs.
Other places such as Los Primos Meat Market, which sources mainly from the Midwest has not seen an increase nor passed any along to customers. As well as places that sell wholesale packaged goods, such as Pioneer Wholesale, say they have not seen anything significant.
Contact Emerson Drewes at edrewes@reviewjournal.com. Follow @EmersonDrewes on X.
