The owner of Kung Food, a Chinese restaurant in San Francisco, told the BBC that recently there has been no increase in prices at the store, but revenue has decreased by about 20 to 30 percent, "some people may have come once a week before, but now they only come once every two weeks."
Yang Xiaochuan said that apart from this, the inventory of condiments and takeout boxes imported from China at the restaurant can still last for more than a month, and he hasn't felt much pressure from the high tariffs at this moment.
Benefiting from the tax cuts during Trump's first term, Yang Xiaochuan became a supporter of Trump. Recently, many people who know him have started asking if he regrets voting for Trump. He said he does not regret it.
However, he also predicted that Trump's tariff policies might affect his business, leading to increased operating costs. But Yang Xiaochuan believes this is an unavoidable pain that needs to be endured, and he is willing to pay the price for his choice, "Money can always be earned back."
The US announced in April a total tariff increase of up to 145% on Chinese products. After China took countermeasures, the cumulative tariff on some Chinese goods even reached 245%.
Under the influence of these high tariffs, Chinese merchants across the US were hit first, especially importers and wholesalers dependent on Chinese goods, shops in Chinatowns, Chinese supermarkets, and Chinese restaurants, all facing rising cost pressures.
"Uncertainty is the bigger concern."
Media reports indicated that in Chinatowns across the US, some food operators relying heavily on imported Chinese ingredients are facing cost increases of 30 to 40%.
Among them, some Chinese restaurants have as much as 70% of their products imported from China, and local suppliers and wholesalers are also beginning to limit purchases from certain restaurants or retailers.
When Yang Xiaochuan initially learned that Trump would impose a 145% tariff on Chinese imports, he was also concerned. However, he explained to the BBC Chinese that only about 20% of his restaurant's products are supplied from China, mainly a series of products from the Hong Kong-based Lee Kum Kee Group and takeout boxes.
He said that the remaining 80% of ingredients, including meat and vegetables, are sourced from US domestic products, and staple foods are selected from Thai and Vietnamese fragrant rice, so they are directly affected by the Chinese import tariff to a limited extent.
Under the pressure of high tariffs, merchants or restaurants began considering whether to pass the cost onto consumers. Since there has been no significant increase in operating costs at Kung Food, Yang Xiaochuan has not taken any measures to raise prices.
However, he estimated that after about a month, when the restaurant's inventory runs out and they need to restock from wholesalers, costs may increase by approximately 20% to 30%. "The impact will definitely come," he said regarding how much of a price increase there will be afterward. "It's hard to say now; we'll see after the inventory is used up."
He said that if the increase is too large, they will consider switching to sauces from other Southeast Asian countries and seeking takeout boxes from other origins.
Yang Xiaochuan said that approximately 20% of the products in the restaurant are supplied from China.
Yong Zhao, co-founder and CEO of the casual chain Chinese restaurant Junzi Kitchen and Niceday Takeaway, is currently observing the Sino-US tariff war.
In an interview with BBC Chinese, he also expressed that he is thinking about whether to replace the origin of imported products in the future. Zhao Yong said that basically all the ingredients in the restaurant are purchased locally in the US, while the products that require imports from China are mainly seasonings, sauces, and packaging materials. He believes that some sauces can be replaced with American products.
"If production is only in mainland China, then there is no alternative, and we just have to bear the high tariffs." For example, he said that spices like Sichuan pepper, star anise, and dried chili, which are needed for Chinese cuisine, can only continue to be imported from China. Additionally, past raw materials for Thai milk tea imported from China are now being produced in Southeast Asia due to supplier relocation, possibly facing short-term stock shortages. "Before, most of the production was in mainland China, but now the suppliers say they want to relocate to Southeast Asia. There may be a one or two-month supply interruption in the short term."
"Overall, our dependence on Chinese ingredients is relatively controllable," since the restaurant does not rely heavily on imported Chinese products, the food prices remain unchanged. However, Zhao Yong expects that if the current tariff policy remains unchanged, inflation in the US could further rise within three months, at which point the restaurant might need to adjust prices.
To him, compared to the increase in operating costs, the uncertainty caused by the tariff war poses a greater concern.
Regarding Trump, he did not explicitly express support or opposition, but the constantly changing tariff policies under Trump's administration have made the business environment very unpredictable. As a businessman, Zhao Yong candidly dislikes this uncertainty. "This kind of political play will lead to big problems, because he represents a government, yet his current approach seems more like that of a businessman—he was indeed a businessman before."
Zhao Yong said they haven't noticed a significant reduction in restaurant traffic yet, "but we do hear from others in the same area that sales at other restaurants have dropped by 20%." He said that with consumers' pessimism about the economic outlook, demand for dining out may decrease, which is the challenge that restaurants will face.
"I think we will truly start experiencing and feeling the impact of the tariffs (after May)," Zhao Yong said.
"Compared to electronic products, food is something bought weekly."
On social media platforms like Xiaohongshu in China, there has been an increase in content related to American Chinese or Asian supermarkets recently, focusing mainly on product prices and inventory situations in supermarkets.
For overseas Chinese, shopping at Chinese supermarkets for daily necessities is part of life.
Mr. Li, who has lived in New York for six years, told BBC Chinese that he visits a Chinese supermarket or Chinese restaurant once or twice a week.
But currently, he has not noticed any significant increase in prices. Although he worries that the prices of Chinese-imported products may continue to rise under high tariffs, he has not hoarded goods like some consumers have. He believes that Trump's high tariffs on China won't last long, "because high tariffs will directly lead to high inflation in the US."
In fact, Trump's tariff policies keep changing. Initially, a 90-day moratorium on imposing high retaliatory tariffs on other countries besides China was announced. On April 22, Trump responded to reporters at the White House, saying, "A 145% tariff is very high and won't be that high, won't reach that high, won't be close to 145%. It will significantly decrease, but it won't go to zero."
According to reports from The Wall Street Journal, the Trump administration is considering reducing tariffs on China to between 50% and 65%.
However, the fluctuating tariff policies are still affecting merchants and consumers.
Reports indicate that in the Chinatown area of New York, wholesale prices of various Chinese goods at Chinese supermarkets have increased by 10% to 50%.
Kam Man Food, founded in 1972, is one of the oldest Asian supermarkets in the eastern United States, with branches not only in New York's Chinatown but also in several locations across the country. In addition to general groceries, seasonings, canned foods, and tea, they also sell fresh meats, seafood, and vegetables.
Owner Chen Xi accepted an interview with BBC Chinese. He said that nearly 80% of the supermarket's goods are imported from around the world, with China being one of the key sources. Additionally, he also imports from Southeast Asia and Europe.
Chen Xi said that some teas, candies, cookies, seafood, and local specialties have already been adjusted accordingly, but the price increase is not significant. Some products with sufficient inventory have not been raised yet.
In addition to sourcing from wholesalers and importers, Kam Man Food also has some direct imports from China and Hong Kong. Under the current unclear tariff policy, Chen Xi said they have paused some imports, storing them in warehouses in Hong Kong or China, "Because it's unclear how much the additional tariff costs will be here, pricing too high affects the market, and pricing too low results in losses. So, it's better to pause and see."
For Mr. Li, what he worries most is the increase in prices of imported Chinese ingredients, "Unlike electronics, which are not frequently purchased, food is bought weekly, so price increases should be directly reflected."
Rising inflation, low and middle-income groups may be hit first.
After Trump announced the imposition of high tariffs on China, representatives of the three major Chinese communities in New York City and representatives of Chinese merchants held a rally in Manhattan's Chinatown, stating that the tariff policy would severely impact merchants and consumers in the Asian and Chinese communities, urging Trump to reconsider the tariff policy.
Joseph Chan, executive director of the Chinatown Business Improvement District, also attended the rally. In an interview with BBC Chinese, Joseph Chan said that this tariff war has brought a great impact on merchants in Chinatown. Apart from Chinese and Asian communities, the area also relies on consumption from foreign tourists, but most of the goods they sell, such as tea, traditional Chinese medicine, seafood, and souvenirs, are manufactured and sold in China.
"Low-income or middle-income people are hit the hardest." Joseph Chan said that due to expectations of price increases, there is clearly a rush to buy goods within the community, "and prices have already gone up—for example, walnuts were $5 per pack a few weeks ago, and now the same pack costs $7.5, reducing people's purchasing power."
Since the outbreak of the pandemic, the US has been under constant high inflation pressure. Starting from March 2022, to control inflation levels, the Federal Reserve continuously raised interest rates over 16 months, increasing the rate from 0.25% to 5.5%. Interest rates were not cut until September 2024.
Federal Reserve Chairman Powell also mentioned in April this year that the increase in tariffs far exceeded expectations, impacting the economy through rising inflation and slower growth. Trump also criticized Powell multiple times, demanding an immediate interest rate cut, warning that the US economy might slow down as a result.
Compared to the Sino-US trade war during Trump's first term, Joseph Chan believes that this time the scope of Chinese-made products covered is more comprehensive and extensive, causing a deeper and more unstable impact on Chinese merchants, "This time it's much worse."
Original article: https://www.toutiao.com/article/7499493416192115239/
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