Trade Wars & McDonald's Expansion: Will U.S. Tariffs Slow Down New Openings?
McDonald's: A Real Estate Empire Facing New Global Challenges
Trade wars are reshaping global commerce, and fast-food giants like McDonald's are not immune. The U.S. government's 25% tariffs on key imports could disrupt supply chains, increase costs, and reshape international expansion. Think about the sheer volume of food products and packaging that move across borders—between the U.S., Canada, Mexico, and beyond. Rising trade barriers could impact everything from beef and potatoes to paper cups and napkins.
But the real story isn't just about burgers—it’s about real estate.
The McDonald’s Business Model: More Than Just Fast Food
With 43,477 restaurants worldwide and an average property value of $2 million per location, McDonald's is not just a restaurant chain—it’s a real estate powerhouse.
As former CFO Harry J. Sonneborn put it:
"We are not technically in the food business. We are in the real estate business. The only reason we sell fifteen-cent hamburgers is because they are the greatest producer of revenue, from which our tenants can pay us our rent."
Expansion & Closures: A Proxy for Economic Health?
In 2024, McDonald's opened 1,704 new restaurants and closed 49, but the geographic distribution tells a bigger story.
"Winners":
China: +917 new restaurants
USA: +100
India: +84
"Losers":
Germany: -18
Sri Lanka: -12
Pakistan: -9
Colombia:( -4
Venezuela: -3