Trade wars have been a hot topic in news cycles this year, with President Donald Trump imposing tariffs on a variety of countries that the United States relies on for goods — and Moab restaurants are starting to feel the pinch of those impacts.
Multiple business owners told The Times-Independent they’re seeing the cost of goods rise, but they aren’t raising prices just yet. CNN, however, reported that businesses eating Trump’s tariffs will soon trickle down to consumers.
“I’m looking at the prices most of the time, three days a week,” said Cactus Jack’s co-owner Thayne Waters. “I’m looking at them [and] how they’re going up and down.”
A tariff is a sales tax imposed on foreign goods that importers are forced to pay, but the cost burden is ultimately put on the consumer.
Trump imposed a 25% tariff on goods shipped from Mexico — which was raised to 30% — but is now on a 90-day pause, temporarily saving consumers 5% on goods, something Waters is keeping a close eye on.
Waters did raise the prices of his omelets earlier this year when eggs were up, and though egg prices have come down, he kept the prices the same to “offset everything else going up.”
Prices sharply increased for producers and manufacturers in July, signaling consumers could soon be paying more for their goods. The latest Producer Price Index, which measures the average change in prices, jumped 0.9% from June to July, raising the annual rate to 3.3%.
Food products rose 0.7%, with raw agricultural products spiking 12.8% from June and vegetables surging 38.9%.
According to CNN, this analysis far exceeded economists’ projections, where they expected July to increase by only 0.2%.
How businesses are reacting
Waters has seen tariffs mostly impact his paper products, to-go containers and chemicals. Each box of paper goods has “easily [gone up] $1 a piece.”
Moab Brewery General Manager Autem Hirschfeld also sees the impacts of tariffs.
“So with my Sysco and my US Foods, a lot of the product and the cost has gone up,” Hirschfeld said. “That’s what they are telling us, the reason is because of the tariffs.”
Hirschfeld hasn’t raised prices just yet.
“If there are specific menu items where I have to raise them so much, I’ll just take them off [the menu],” Hirschfeld said. “I’m not going to charge somebody [extra], or we’ll try to find a new item that’s more cost-efficient for families. We don’t want to be the most expensive restaurant in town.”
Hirschfeld has also noticed customers being more cognizant of how much they’re spending this year, noting she’s seen more foot traffic at City Market and families are “packing up, getting lunches and buying their dinners there, rather than going out to all the restaurants and the shops.”
She suspects consumers are learning how to save money while vacationing.
The Kem C. Gardner Policy Institute released a Utah Consumer Sentiment report for July, recording that buyers’ confidence fell nearly 5% in the Beehive State. This is the lowest reading of Utah consumer sentiment since September.
The report stated Utah households are worse off financially compared to last year and expect financial stability to worsen. Many Utahns also have less confidence in the state’s business conditions.
The University of Michigan reported similar trends nationwide, with American consumer sentiment scaling back 5% in August, nearly creating a 14% deficit compared to last year.
Surveys of Consumers Director Joanne Hsu said, “This deterioration largely stems from rising worries about inflation.”
Consumers expect unemployment rates to rise in the future.
Waters hasn’t raised prices yet despite seeing the early impacts of tariffs, but says he’s keeping an eye on products specifically from Mexico, such as lettuce, avocados and citrus.
Alex Borichevsky, co-owner of 98 Center, also said he’s expecting tariffs to impact the restaurant soon.
“My job is to purchase efficiently and adjust prices accordingly, without scaring customers,” Borichevsky said.
Immigration fears are also affecting business
Along with tariffs, Waters attributes higher prices to immigration fears.
The food distributor he works with, Nicholas and Company, told him a couple of months ago that green peppers are “through the roof” because there hasn’t been anyone to pick them. Strawberries and lettuce are on the same path, which are all sourced from Central California.
“They don’t have people to pick the fruit,” Waters said. “It’s gonna cause some serious issues.”
Just last month, federal authorities raided California legal marijuana farms and arrested more than 360 people, leaving one dead. California local officials said federal actions are spreading fear within immigrant communities.
One farmer from California reported 70% of her workforce disappearing because of Immigration and Customs Enforcement (ICE) fears. Another farmer who oversees strawberry fields noted he usually has 300 workers, but is down to 80, which is on par with Waters being told that strawberry prices are skyrocketing.
Waters is seeing similar trends in his own restaurant.
“I employ a lot of Hispanics here that have their paperwork and are legal, but they’re still kind of scared in case there is a raid,” Waters said. “I have a guy here that was born here … He is scared that he’s gonna get picked up and detained for six months.”
Despite these workers living paycheck to paycheck, Waters said they’re still scared to come to work. He managed a restaurant in Moab where an ICE raid occurred several years ago and he didn’t have anyone to come into work despite all his workers having legal documentation.
With the worries of inflation, tariffs and now immigration concerns, Waters believes the federal administration is creating turmoil within the states.
“Touching on tariffs and immigration affecting every single part of this whole nation, all the way up into Utah, we’ll see what happens,” Waters said.
Note to readers • Lizzie Ramirez is a Report for America corps member covering local government and tourism in Grand County for The Times-Independent. Your donation to match our RFA grant helps keep her writing stories. Please consider making a tax-deductible gift of any amount today by clicking here.
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