President Donald Trump's trade war is causing pain for many US industries, but the tariffs could actually help US restaurants.
The retaliatory tariffs on US agricultural goods are expected to cause a supply glut, which is already leading to price cuts for major agricultural goods.
This means restaurants will pay less for ingredients like pork, cheese, and corn.
According to restaurant invoice management company Plate IQ, the US restaurant industry should save just over $7.5 million due to Trump's trade war this year.
President Donald Trump's trade war is taking its toll on a slew of US industries, but there could be one that comes out on top: restaurants.
While the president's various tariffs are driving up costs for industries ranging from boat manufacturing to TVs, data provided to Business Insider by restaurant invoice management company Plate IQ showed that restaurants are actually seeing prices for ingredients fall due to the tariffs.
For most of the goods, Plate IQ's explanation for the drop is simple: the US exports a lot of goods, so as farmers are hit with an oversupply, the price of the items will drop and make it cheaper for the restaurants.
While not on the Plate IQ list, one of the most prominent of these price changes for US farmers is soybeans. The crop is a key export, particularly to China, and the recent tariffs on US soybeans by foreign countries is causing a supply increase and a dramatic price drop.
As these commodity prices drop, so too are costs for restaurants that buy these ingredients. Plate IQ used price trend data from its restaurants to determine the savings for the US restaurant industry between March 2018 and December 2018 across six major ingredients: pork, corn, apples, cheese, potatoes, and seafood.
In order to determine the expected future price change, Plate IQ looked at 500,000 restaurant invoices from July 2017 to July 2018. According to the data, seafood is the only one of those major ingredient groups that is expected to increase in price over the course of the year.
Obviously restaurants that are heavily weighted toward certain ingredients (such as pork) will see greater cost decreases than those that lean more toward seafood. But all told, Plate IQ's data shows that the restaurant industry will save roughly $8 million due to the tariffs.
Here's a breakdown of how much the restaurant industry could save on each ingredient because of Trump's trade war.
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