The introduction of a substantial 54% tax on imports from China by President Donald Trump has created significant challenges for small businesses in San Francisco’s Chinatown. These enterprises, which have only recently begun recovering from pandemic-related hardships, are now facing an uncertain economic landscape.

Impact on Local Business Owners

Business owner Nany Yu, who operates a gift shop reliant on imported goods from China, expressed her concerns regarding the financial implications of the new tariffs. Her annual visit to China in April is particularly critical this year; she hopes to negotiate terms that would allow her to minimize any price increases passed onto her customers.

“Whenever there’s a price adjustment or tariffs, I just have to eat that up and lower my profit,” said Yu. “I need to go to China and talk with my supplier if I can get a discount.”

Yu is not alone in her predicament. Many other local business owners—including those in groceries, jewelry, and clothing—are also grappling with the repercussions of increased import costs.

Finding Alternatives Becomes Difficult

In previous years, businesses in Chinatown often circumvented tariffs by rerouting their shipments through countries like Vietnam or various regions in Latin America and Africa. However, the comprehensive nature of the current tariffs makes finding alternatives increasingly difficult.

During Trump’s first term, Ker Gibbs, then-president of the American Chamber of Commerce in Shanghai, assisted in identifying alternatives to escape the burdens of tariffs. The current landscape, as Gibbs notes, is more complex due to the increased rates and less clear strategic positioning from the government.

Economic Implications and Market Response

The uncertainty surrounding the new tariffs has led to significant volatility in the Asia-Pacific financial markets, with investors expressing concerns about the potential ripple effects on the global economy.

Anastassia Fedyk, an assistant professor of finance at the Haas School of Business at UC Berkeley, raised questions about the broader economic consequences. “So what does this mean for the global economy? Are we about to experience a recession here in the U.S. and all over the world?”

Resilience in the Face of Challenges

Despite the pressures, Yu remains hopeful that both she and her peers can navigate these challenging times. “Hopefully, we can still survive and go through this together,” she stated.