San Francisco's Chinatown Businesses Raise Prices To Absorb Tariff Costs

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San Francisco's Chinatown is feeling the pressure of rising tariffs on Chinese imports. Many businesses reliant on goods from China are raising prices.

Transcript

00:00In San Francisco's historic Chinatown, businesses are facing challenge of

00:06rising costs due to tariffs on Chinese imports. To cope, many are raising their

00:12prices. At Lion Trading, a religious incense shop, the manager explains that

00:1798% of their products are affected by these tariffs as everything is imported

00:23from China. Basically 98% of our store products are all affected by the

00:28tariffs because everything is manufactured and imported from China.

00:31There's no way in America that they can make Jaws papers like this. Obviously

00:38they can make incense, but it's not the traditional incense that we use.

00:41Despite the price hike, they are absorbing half of the cost to ease the

00:46burden on customers. We are planning to raise the price about 50% and just for

00:53us we will absorb the other 50% for our customers. I do feel like if we

00:58raise prices really high very fast, people won't be ready. We are slowly

01:04raising the prices on incense. So for example, if we're selling a bundle of

01:10incense for $17.99, it will probably go up to like $22.23. Customers like Stephanie

01:17are feeling the impact as rising prices force them to buy less. She says instead

01:24of enjoying more items, they have to cut back that changes everything because

01:30instead of getting three, I'd probably just get one, you know, and, and it would

01:35be like, this is something you get to enjoy, right? And when you have to cut

01:41back and you have to cut back, you don't get what your enjoyment stuff is cut

01:47first. In Chinatown, restaurants like Lai Hong Lounge are also slowly

01:53increasing prices to avoid scaring off customers. Owner Leon Zhu shares that the

01:59goal is to keep price hikes as minimal as possible. I own three restaurants in the

02:05Bay Area, including Lai Hong Lounge in Chinatown. We've had to adapt to the

02:11current economic status with the rising tariffs by slowly increasing our prices.

02:16Our strategy is to increase it as little as possible so that we don't scare off

02:22our customers. However, locals like Listang are concerned about the future. Then it's

02:30gonna impact maybe like how much people can go out together or how many people

02:34can, you know, be in a group together because it's gonna, obviously the cost is

02:39gonna be a lot more for, you know, the larger group, the group. I think in terms

02:45of the small businesses in Chinatown, I'm, I'm worried about them because I know

02:50restaurant businesses in general have a really small margin. So I do worry about

02:57some of the smaller businesses, how they're gonna manage. She worries about the

03:04small margins for businesses and how rising costs might affect the community,

03:08especially smaller restaurants that already struggle.

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