August 19, 2022

Date: 4th August 2019

As the trade war between the United States and China continues, restaurants chains in the US are looking for opportunities to expand in China in search of sales. 

Recently, the tensions between the two nations again surged when US President Donald Trump announced that he may impose tariffs on about $300 billion worth of Chinese goods that do not currently have any duties on them.

The trade war is adding to the misery of the Chinese economy, which is experiencing slow growth in GDP. The country reported 6.2 per cent economic growth last month which has been the lowest in 27 years.

Aaron Allen & Associates said that restaurant chains find slowdown in economies beneficial as consumers search for more inexpensive food options. 

Regardless of the dampening economy of China, it remains a good choice for restaurant chains that seek new customer bases. This is mostly due to its large population. The Chinese economy, in its slow phase, still performed better than that of the United States.

According to Aaron Allen, restaurants may still face problems due to trade tensions. This is because most restaurants get their supplies a combination of home markets and local markets where they operate. As a reply to the tariffs imposed by the US administration, China has also imposed duties on US goods, which may ultimately result in increased costs of food for US restaurants looking to expand in China. 

Steve Easterbrook, McDonald’s CEO, said in a statement that the company is very positive about its future in China. The company currently aims to open over 400 stores by the year 2019 in China.

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Last year, McDonald’s operations in China were affected by the tariffs imposed by China and the US on each other’s goods worth billions of dollars. Consumer confidence is pulled down immensely by such events.