Restaurant stocks have seen an upswing as US President Donald Trump has announced a 90-day pause on higher targeted tariffs for most countries, excluding China.
Stocks of Bloomin’ Brands increased 15%, while Dine Brands and Brinker International saw growth of 11% and 9% respectively, as reported by Restaurantbusinessonline.com.
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Trump’s decision comes as a response to the lack of retaliatory measures from over 75 trading partners and their willingness to engage in discussions with the US.
The halt in tariff increases did not extend to China, which responded by imposing its own 84% tariff hikes.
In turn, Trump escalated the situation by increasing tariffs on Chinese goods to 125%.
Trump’s decision to pause the tariffs was influenced by market reactions and concerns over economic stability.
“People were getting a little queasy,” he admitted, acknowledging the market’s influence on his trade strategy, as reported to CNN.
The US National Restaurant Association had previously estimated that tariffs on Mexico, Canada and China would cost the foodservice industry $12bn, according to Bloomberg.
The association believes that new tariffs will disrupt restaurant operators.
Concerns among restaurateurs ranged from the expense of paper takeaway sacks to the financial burden associated with launching new establishments.
Economic downturn apprehensions also posed challenges for franchises in securing funding.
Despite the temporary relief, the Trump administration now faces the challenge of negotiating numerous trade agreements within a three-month window.
