San Francisco Chinatown Businesses Enter Survival Mode During Trade War

Business owners like Mei Zhu in San Francisco’s Chinatown say they’re struggling to stay afloat, facing declining sales and an uncertain future, as the U.S.-China trade war drags on.

“With tariffs increasing so drastically, it’s very difficult to keep it going,” said Zhu, who has owned Mei’s Grocery on Stockton Street for the past 11 years.

Around 90% of the goods at her store are imported from China — now subject to tariffs as high as 245%. Her inventory includes sauces, dry noodles, candies and cookies.

According to Zhu, wholesalers have absorbed some of the price hikes associated with the tariffs, so she’s raised her prices by 50% for certain items. However, some products now cost 145% more, so she’s stopped stocking them. For the remaining stock, higher prices are driving customers away, and sales are down 30%, Zhu said.

“If things continue like this for another month or two, the only option is to end the business and stop operating,” she said.

Several Chinatown business owners, interviewed by KQED through a Cantonese interpreter, echoed Zhu’s concerns. They say that if the trade war persists, they’ll be forced to shut down or retire early.

The situation has pushed San Francisco’s Chinatown — which has served as an immigrant gateway and economic hub for more than a century — into an existential crisis, according to Malcolm Yeung, executive director of the Chinatown Community Development Center.

“ This has always been a community that has been built around trade,” he said. “Trade created an opportunity for upward economic mobility for people through owning stores, or by leveraging relationships that they have back in China.”

Yeung said the tariffs signal that this way of life is cut off.

Since taking office, President Donald Trump has deployed tariffs as a tool to pursue his policy agenda, which is meant to encourage domestic manufacturing and reduce trade deficits between the U.S. and its largest trading partners. China, in particular, has retaliated by raising its tariffs on all U.S. goods to 125%. As of Friday, China reportedly appeared to roll back some of the tax on U.S.-made semiconductors.

David Bachman, a professor of China studies at the University of Washington, said Trump’s tariff policies could be better defined.

“If [the Trump administration] is out to re-establish American manufacturing, they could have confined those tariffs to manufactured products and ignored agricultural products or other areas where it was extremely unlikely that the U.S. would establish production lines,” Bachman said.

Consumers of Chinese imports are likely to feel the impacts of the tariffs, too, according to Bachman.

Daniel Young lives in Antioch and travels to the Chinatowns in San Francisco and Oakland to get things he can’t get anywhere else. He had a grocery bag full of Chinese products, including “Spanish ham” and lamb-flavored potato chips.

“ These bags were $11 a piece. They used to be $7. It’s ridiculous,” Young said, referring to a bag of fortune cookies he had bought.

Sam Liang, owner of Run Feng Hai Wei Chinese Herbal in San Francisco’s Chinatown, sells ingredients used in traditional Chinese medicine, including Tangerine peels, ginseng and chrysanthemum flowers. He said his suppliers have raised their prices by $3 to $4 a pound.

“The impact is already becoming apparent now. When we go to suppliers to get goods, they’re often out of stock or have shortages,” Liang said.

Liang has operated Chinese medicine businesses in San Francisco’s Chinatown for the past eight years. He said his business was already struggling, but with the latest tariffs, revenue and profit have decreased by around 30%.

He added that some products might not appeal to his customers if they are manufactured in other countries.

“I’m worried about running out of inventory,” Liang said.

These merchants may experience relief from the economic pressures soon. On Tuesday, Trump signaled that the “tariffs will come down substantially.”

“It’s very difficult to predict; we’re just taking it one day at a time,” said Liu, owner of Beijing Shopping Center, which specializes in specialty clothing from China, such as hand-embroidered wedding dresses.

Lui added that if the tariffs continue, she’ll consider pivoting to sell more clothing produced domestically — or close the store entirely.

Yeung said business owners in the neighborhood are feeling an “emerging sense of powerlessness,” but he’s confident the community will weather the storm, given its history of surviving adversity.

He said the community has overcome discriminatory policies, like the Chinese Exclusion Act, urban redevelopment and, more recently, the COVID-19 pandemic and the subsequent rise in hate crimes targeting Asian communities.

“ That’s actually the Chinatown story more than virtually anything else,” Yeung said. “We’ve found ways to just be here through thick and thin. I think we’re entering into a thin period, but this community in many ways is built for that.”