New York’s Chinatown businesses say they are struggling in Trump’s tariff war

Small business owners in New York’s bustling Chinatown and surrounding areas say they are trying to absorb the costs of tariffs and fear for the future of the historic neighbourhood.

Lisa Cheng Smith at her Yun Hai Taiwanese Pantry in Brooklyn. Picture: Joseph Kelly/The Australian

You can now listen to The Australian's articles. Give us your feedback.

You can now listen to The Australian's articles.

Cory Ng wants to help save New York’s Chinatown for the next generation. But the 37-year-old co-owner of two modern Cantonese-American restaurants – the Potluck Club and the Phoenix Palace – fears “there may not be a Chinatown” in the future.

Mr Ng said the small business community in the Chinatown neighbourhood, located on the lower east side of Manhattan, was already facing many complex challenges even before getting hit by Donald Trump’s sweeping tariffs.

In January, congestion pricing was introduced in Manhattan south of 60th Street. This saw drivers getting hit with a toll rate of $US9 ($14) during peak hours.

Mr Ng told The Australian that, in a lot of places, “business immediately went down about 30 per cent”.

Asked how long he could press on if the tariffs stayed in place, he responded: “Man, that’s a dark question … I’m not setting myself a doomsday clock for my business. We’re going to keep making it work.”

Businesses in limbo

The imposition by Mr Trump of prohibitively high tariffs on Chinese goods of up to 145 per cent in his trade war with Beijing has been a body blow to businesses in the Chinatown area.

In Chinatown, 98 per cent of businesses are small and, in 2020, the neighbourhood supported about 67,000 residents, 38,000 workers and up to 4000 enterprises.

Although the tariffs have since been slashed to 30 per cent as part of a temporary 90-day pause, businesses remain in limbo.

Mr Ng said the new administration appeared to be changing its mind about tariffs every week. “So it’s up, down, left, right and you’re at the mercy of that,” he said. “It’s just confusing.”

“At one point it was at 145 per cent … That’s everything we serve on the plate. Every time we put food on the table. That’s every ingredient,” he said.

“And it’s stuff that you don’t even think about. Stuff like soy sauce, rice. Stuff that may even be invisible on the dish. Marinades. Stuff that doesn’t even get seen. All went up in the blink of an eye off of this administration’s decision.”

Common issue

So far, Mr Ng has absorbed the extra costs rather than passing them on to customers – a common story among business owners who spoke to The Australian.

Jason Liu, the co-owner of Soft Swerve – a specialty Asian ice cream store that has operated in Chinatown for eight years – said there had been “a lot of talk and a lot of uncertainty about what will happen to people who shop at supermarkets for certain ingredients that they only can source from China”.

“People are worried about what will happen to the restaurant pricing, the cost of living for people who live in the area. So those are all big major concerns,” he said.

Mr Liu said he imported cups from mainland China for his business but was lucky because he had a large inventory and was “not affected at the current moment. But going forward in 2026 when we will have to make a reorder, we will then have to reassess”.

‘Cloud of uncertainty’

While he had avoided the higher China tariffs, Mr Liu said he sourced some ingredients for his ice creams from Japan and Thailand.

This meant there was “definitely a big cloud of uncertainty” about how the tariffs would impact pricing moving forward.

Lisa Cheng Smith, who in 2018 founded the Yun Hai Taiwanese Pantry over the bridge in Brooklyn, said her business had been hit by the baseline 10 per cent tariff, which she described as “a lot for us”.

She also warned of the “secondary effects of the volatility of the tariffs”.

“The Taiwanese currency has spiked because of this trade volatility. It’s spiked 8 per cent. So, for us, that’s like an effective 18 per cent tariff.”

Predatory lending was another emerging problem.

“Cash is like water for a small business,” she said. “To weather a tariff war, you have to have cash flow. And that, I think, is what’s super, super hard for small businesses.

“People already call me left and right. Do you need capital? Do you need capital? … People are just going to start taking out more loans like that.”

Margins already ‘really thin’

Vic Lee, the co-founder of the nonprofit organisation Welcome to Chinatown – established in 2020 to help support the small business community – told The Australian that margins were already “really thin”, especially in the food and beverage sector.

In 2020, New York’s Chinatown neighbourhood supported about 67,000 residents, 38,000 workers and up to 4000 enterprises. Picture: Getty Images

“Food and beverage is the largest sector now for small businesses after 9/11. Pre-9/11 it was the garment industry,” she said.

“They do serve a population, in particular the senior population, which is one of the largest demographics here.”

She said a lot of seniors “lived below the poverty line” and that businesses were “grappling with how to handle the tariffs – do they eat the cost, do they pass it through? If they are passing through the cost there’s almost like a level of guilt as well as, ‘how do you message that?’ Will consumers continue to support these Chinatown businesses?”

A survey commissioned by Welcome to Chinatown and published in July 2022 said the biggest challenges business owners in the area faced included rising costs and thinning margins, a declining consumer base, a lack of succession planning and low rates of technology adoption.

Mr Ng said that Chinatown was shrinking and “changing drastically”, while real estate was becoming more expensive and the younger generation was leaving the area to secure better jobs because “no one wants to be a tofu maker”.

“We were very adamant about building our businesses in Chinatown, you know, building new business,” Mr Ng said.

“My son is four, almost five. There may not be a Chinatown for him.

“There may not be a Chinatown for him if my generation doesn’t continue to build here.”