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Ever since Donald Trump imposed a 145% tariff on Chinese imports, Andy Wang has been a panic buying item from rice wine to plastic containers at his restaurant in Chinatown, New York.
Wang said the expected price hike for Chinese goods could close the Taiwanese pork chop house, which he founded 26 years ago, and drive him to early retirement.
“We have to store inventory so that we can stabilize our operating costs as long as possible,” he said in an interview in the restaurant’s basement surrounded by extra supplies. “Everything you can find here, including some food ingredients, comes from China and the US has no alternatives or very expensive.”
The Wang is one of the thousands of Chinese-American Chinese small and medium-sized Chinese businesses in New York and has struggled to deal with the worst US-China trade war ever, as Washington and Beijing show little signs of flexibility to hit the trade.
Trump’s aggressive tariff hikes have hit a particularly hard hit on the floating community, relying on Chinese goods.
Taiwanese Pork Chop House Restaurant in Chinatown, New York ©Pascal Perich/ft
The economic impact is worse than what Chinatown experienced after it disappeared on September 11th for several months, according to the New York advocacy group The Chinatown Partnership.
“Taxes will have a lasting and devastating impact on the Chinese-American community,” said Wellington Chen executive director.
New York, the largest Chinese home of any US city, imports more goods from China than anywhere else, except Switzerland and Australia.
Chinese-American retailers and food catering businesses rely heavily on global workshop suppliers to fill shelves and equip kitchens.
“I charge affordable prices, but I still get profit by procuring from China,” said Wang, who sells pork chops for $8.75, cheap by New York standards.
If Trump’s tariff hikes push the prices of Chinese-made products up, that business model could collapse.
Wu Jianxi, General Manager of C&A supermarket at Flushing, Chinese-rich New York neighborhood © Pascal Perich/ft
The Chinese business owner said that they can barely pass on rising costs to price-sensitive customers without lowering sales.
“We’re a great place to go,” said Wu Jianxi, general manager of C&A supermarkets at Flushing, a New York district known for its Chinese community. “They’ll have to cut the corners.”
Three NYC food wholesalers said deals with Chinese suppliers have plunged since Washington imposed the latest tariffs on Beijing. Deng Long, owner of New York-based trading company Strong America Ltd, said his Chinese partner has halted adoption of the new order as prospects for a tariff war remain unclear.
“It appears China is ready to separate from the US,” Deng said, adding that his Chinese suppliers had little interest in sharing the burden of tariffs.
US buyers also withdraw their orders. Last week, Hei Chan, manager of Newcomman LLC in Chinatown, New York, asked his Chinese and Hong Kong partners to cancel the shipment of more than $1 million in dry mushrooms until the tariff dispute was “settled”;
Hei Chan, Manager of New Kam Man LLC in New York Chinatown©Pascal Perich/ft
The plunge in imports has led to lower inventory among wholesalers, with some of them requesting higher prices or rations. Deng of Strong America said it plans to raise prices in half next week after a 10% increase this week.
“Selling them at the original price at 145% tariffs will give you free Chinese products,” Deng said in a warehouse in Long Island City where stock is falling with high-speed clips.
Other wholesalers have begun setting the largest sales quota for buyers who are racing. The king of Taiwanese Pork Chop House said he could only buy one box of microwave bowl on Monday after placing an order for six people.
“This is really pathetic,” he said. “Everyone is hoarding.”
The rise in wholesale prices is beginning to spread to retail. Six Chinese supermarkets and Flushing in China in Chinatown have told the Financial Times to raise prices of Chinese-made products from 10% to 50% from rice cookies since the latest tariff hikes.
More price increases are in the pipeline as most Chinese business owners expected stock to buy before the tariff hikes went out within two months.
C&A supermarket WU said prices for Chinese products could “surge” as soon as next month, as soon as the market begins to rely on imports subject to higher tariffs.
“We cannot live with 145% tariffs a day,” he said.
