BREAKING: Tariffs and Fast Food: How Trump’s 2025 Trade War Hits McDonald’s

Tariffs and Fast Food: The 2025 trade war under Trump’s leadership affects both McDonald’s businesses and American consumers.

JV Charles, Senior Editor at jvpolitical.com May 4, 2025.

While the Golden Arches represented American convenience McDonald’s now struggles through a political and economic storm in 2025 that will transform its operations and affect consumers through increased costs.

Starting from April 2, 2025 President Donald Trump launched “Liberation Day” tariffs which initiated a trade war with extensive effects and introduced a 145% tariff on China together with 24% on Japan, 25% on South Korea and a general 10% tariff on most other countries.

jvpolitical.com explores the effects of tariffs on McDonald’s operations that serve 69 million people each day and examines what this development means for American consumers who face inflation and economic uncertainty.

The Tariff Shockwave: A Blow to McDonald’s Supply Chain

The McDonald’s restaurant chain operates more than 40,000 locations around the world supported by a global supply chain network.

The fast-food giant sources beef patties from Australia and coffee beans from Brazil while obtaining packaging from China through an intricate network of imports to maintain affordable menu prices.

Trump’s tariffs have created significant disruption to McDonald’s supply chain system. The 145% tariff on China which supplies packaging materials and equipment has raised McDonald’s costs while separate tariffs of 24% on Japan and 25% on South Korea target electronics and kitchen machinery.

The 10% baseline tariff on coffee-exporting nations like Brazil creates pressure because US climate conditions prevent easy relocation of coffee production.

The impact is already visible

McDonald’s experienced a 3.6% sales reduction in the US during the first quarter of 2025 which marks its most significant drop since COVID-19 lockdowns alongside an unexpected 1% global sales decline.

CEO Chris Kempczinski described these economic conditions as the “toughest of market conditions” because the tariffs have created economic uncertainty.

Limited-service restaurants including McDonald’s have experienced a 30% price hike since 2019 because of inflation and wage increases.

Now, with tariffs adding to input costs, McDonald’s faces a dilemma: McDonald’s must decide between taking on added costs that squeeze profit margins or transferring them to customers which could result in losing more business.

The decline in consumer confidence demonstrates significant political consequences.

Tariffs represent a multifaceted challenge that affects both business operations and political landscapes.

Economic growth in the United States fell by 0.3% during the first quarter of 2025 marking the first contraction since 2022 which increased concerns about an impending recession.

Americans are reducing discretionary expenditures including restaurant visits as consumer confidence sharply dropped.

McDonald’s has experienced a decrease in visits from low-income consumers earning at most $45,000 per year which represents 28% of the US population totaling over 90 million people.

This decrease in consumer spending reflects overall hospitality industry patterns as brands such as Starbucks, Domino’s, and Chipotle disclose declines due to inflation and economic instability.

Politically, Trump’s tariffs are a double-edged sword.

These measures attract his America First supporters with promises to enhance domestic manufacturing and job creation through increased import costs.

The President says his tariffs generate $2 billion per day but economists believe this revenue figure is overstated while he maintains that American citizens will avoid harm.

The actual situation reveals a contrasting narrative to official statements. Economists predict that consumer prices will increase by 1-2% from tariffs, disproportionately affecting low- and middle-income families.

The rising costs due to tariffs might push McDonald’s Big Mac meal prices near $10 which could make even its steadfast customers choose home-cooked meals instead.

The political adversaries of Trump are taking advantage of this widespread frustration among citizens.

Senator Elizabeth Warren and other Democrats have attacked the tariffs stating they harm consumers because businesses are increasing prices due to expected impacts.

Trump’s team led by Commerce Secretary Howard Lutnick insists that the tariffs will push other nations to open their markets which will result in lower prices.

The USMCA exemptions for Canada and Mexico as avocado suppliers limit McDonald’s benefits since other suppliers worldwide must pay high tariffs.

McDonald’s Response: Value Menus and Lobbying Power

McDonald’s isn’t sitting idly by.

McDonald’s is addressing declining customer numbers by expanding their $5 Meal Deal which includes a McChicken, McDouble, four-piece nuggets, fries and a drink to all locations through 2025.

The company’s attempt to regain cash-constrained consumers through this move represents a risky approach.

McDonald’s operating margin reached 46% last year while showing potential for cost absorption but tariffs increasing costs threaten to reduce this margin.

The company expects to invest between $3.0 billion and $3.2 billion in capital expenses during 2025 to establish 2,200 new restaurants primarily in recovering markets such as the Middle East and Japan.

McDonald’s future growth strategy faces significant risks from worldwide tariff unpredictability which impacts its intended expansion in China where it launched 60% of its new outlets the previous year.

Throughout its operations McDonald’s has historically dealt with trade disputes on the political front.

Throughout Trump’s initial presidential term Apple received tariff exemptions after its CEO Tim Cook gave $1 million to Trump’s inauguration fund.

Due to its substantial economic impact McDonald’s will probably seek comparable trade relief.

The company plans to lobby for tariff exemptions on essential imports such as coffee and packaging by demonstrating how increased costs negatively impact American consumers and employment.

But such exemptions raise a political question: Does the exemption system weaken Trump’s trade policies or does it create advantages for large corporations while harming smaller businesses?

The Bigger Picture: A Trade War’s Lasting Impact

The effect of tariffs on McDonald’s illustrates a wider shift in both political and economic landscapes.

Companies such as General Motors predict a $5 billion financial setback in 2025 due to Trump’s trade war which is disrupting global supply chains.

Smaller companies struggle more than McDonald’s because they cannot leverage the same lobbying power and may face insolvency as costs increase.

The tariffs are projected to contribute $166.6 billion to federal revenues in 2025 which amounts to 0.55% of GDP establishing them as the most significant tax increase since 1993. But at what cost?

The average household in the US should expect to experience a $1,243 increase in taxes resulting in a 1.2% reduction in after-tax income.

Customers of McDonald’s experience reduced spending power for fast food meals which leads to increased pressure on the fast-food industry.

Globally, the tariffs are straining alliances

Australian Prime Minister Anthony Albanese voiced puzzlement over the imposition of a 10% tariff on the uninhabited Heard Island and McDonald Islands and declared that “nowhere on Earth is safe” from tariffs.

The 125% retaliatory tariffs China placed on US goods have severely impacted American farmers and provoked debates about the political viability of Trump’s tariff approach.

Rural America remains uncertain about backing Trump through immediate economic hardship that might lead to future rewards or abandoning him as export markets decrease.

What’s Next for McDonald’s and Consumers?

McDonald’s faces the challenge of maintaining affordable prices while ensuring profitability during the ongoing trade war.

Even though the $5 Meal Deal represents an initial effort McDonald’s has taken to address economic pressures, ongoing tariff increases could force the company to raise its prices eventually.

American consumers face significant risks because increased fast-food prices could symbolize larger economic issues which may shape voter opinions before the 2026 midterm elections.

At jvpolitical.com, we see this as a test of Trump’s America First agenda: The administration needs to fulfill its promises while ensuring that the consumers it aims to protect do not feel abandoned.

What do you think? Do higher McDonald’s prices make you rethink where you eat and how do these changes reflect on your perception of Trump’s trade strategies?

Visit jvpolitical.com to read ongoing updates about this story after leaving your thoughts in the comments section.

References

The Guardian. (2025). Both McDonald’s and General Motors report negative business effects from Trump’s ongoing tariff conflict.

Newsweek. (2024). McDonald’s price reduction strategy faces serious issues due to Trump’s policies.

Reuters. (2025). McDonald’s revenue worldwide experienced an unexpected decline due to tariff-induced damage to consumer confidence.

CNBC. (2025). “Trump tariffs: Recession fears hit Starbucks, Chipotle, McDonald’s stocks.”

Tax Foundation. (2025). “Trump Tariffs: The trade conflict initiated under Trump administration created significant economic consequences.