Business owners in San Francisco’s Chinatown, including Mei Zhu, are facing significant challenges as the U.S.-China trade war intensifies. With tariffs soaring up to 245% on many Chinese imports, small businesses are grappling with declining sales and rising costs. Mei Zhu, owner of Mei’s Grocery, fears that if these pressures continue, she may be forced to shut down her store. Chinatown, a historic economic hub for immigrant communities, now faces an uncertain future as these tariffs threaten its very existence.
Impact of Tariffs on Chinatown Businesses
Mei Zhu’s Mei’s Grocery, a local staple on Stockton Street, is feeling the brunt of the trade war. About 90% of the products in her store are imported from China, including essential items like sauces, noodles, and snacks. With tariffs on these goods reaching as high as 245%, Zhu has been forced to raise prices by 50% on some products. Other items have seen price hikes of 145%, and she has stopped stocking them altogether.
Despite efforts to manage costs, Zhu has seen a 30% drop in sales. If things continue like this for another month or two, she may be forced to end the business and stop operating.
Other business owners in Chinatown are sharing similar concerns. Many fear that the trade war could force them to retire early or close their doors for good. Local businesses that have long relied on trade with China are now facing an existential crisis, as higher tariffs and inflation strain their operations.
Chinatown’s Economic Struggles
Chinatown has long been an economic hub for San Francisco’s immigrant community, with trade serving as a key source of upward mobility. Malcolm Yeung, executive director of the Chinatown Community Development Center, explained that the area’s economic success was built on relationships and trade with China. However, the tariffs threaten this foundation, cutting off the lifeblood of many Chinatown businesses.
The U.S. government, under President Donald Trump, has used tariffs as part of a broader strategy to reduce the trade deficit and encourage domestic manufacturing. These tariffs, especially those on Chinese goods, have significantly impacted businesses that rely on imported products. In retaliation, China has imposed similar tariffs on U.S. goods, further complicating the situation.
Rising Prices and Shortages
For businesses like Run Feng Hai Wei Chinese Herbal, the effects of the tariffs are already being felt. Sam Liang, the store’s owner, specializes in traditional Chinese medicine products such as ginseng and chrysanthemum flowers. His suppliers have raised prices by $3 to $4 per pound, and shortages are becoming more common. Revenue has decreased by 30% since the tariffs were imposed.
Consumers are also noticing the impact. Daniel Young, a resident of Antioch, visited Chinatown recently to buy specialty Chinese products. Items that once cost around $7 are now priced at $11, reflecting a sharp rise in costs. The increase in prices is turning off many customers, further reducing business for local stores.
The Future of Chinatown Businesses
While some business owners hope for relief, others are uncertain about the future. President Trump recently suggested that tariffs might decrease, offering a glimmer of hope for struggling businesses. However, as many business owners emphasize, it’s difficult to predict how the situation will unfold. If the tariffs continue, some may have to pivot their business models or close their stores altogether.
Yeung remains optimistic that Chinatown’s business community will persevere. He acknowledged the emerging sense of powerlessness felt by many but pointed to the area’s resilience. Chinatown has survived numerous hardships in the past, from discriminatory laws like the Chinese Exclusion Act to challenges such as the COVID-19 pandemic.
“We’ve found ways to just be here through thick and thin,” Yeung said. “I think we’re entering into a thin period, but this community in many ways is built for that.”
Will Chinatown Overcome This Crisis?
The current crisis in Chinatown highlights broader concerns about the impact of global trade tensions on local businesses, especially those with close ties to foreign markets. For now, San Francisco’s Chinatown businesses are holding on, hoping for changes in trade policies that might ease their burden. As tariffs continue to weigh heavily on businesses, it remains to be seen whether these shops can survive or whether more will be forced to shut down.
