In May, as trade talks between China and the U.S. stalled, the Trump administration increased tariffs on $200-billion worth of Chinese goods from ten to 25 percent. And business owners are now starting to feel the effects. CGTN’s Karina Huber has more on the impact on stores in New York’s Chinatown.
Pearl River Mart has been in business for 48 years. It is the go-to shop for New Yorkers looking for affordable items from Asia. But prices on many goods are about to get less affordable.
Seventy percent of what the store sells is made in China – including these slippers – one of its biggest sellers.
“The next shipment, which I am expecting in about three weeks definitely will be affected,” said Ching Yeh Chen, Co-Founder of Pearl River Mart.
Affected by a 25 percent tariff that Trump has imposed on roughly $200 billion worth of Chinese imports. That’s on top of what Chen said was a 30 percent duty she paid before the trade war.
“So it’s 55 percent going to the Treasury Department,” she said.
The slippers are made of polyvinyl chloride or “PVC” – a material on the latest tariff list. According to her custom broker, the majority of what she sells will be subject to additional tariffs.
Right now, the slippers retail for $16 but Chen said the price will have to rise to $20 to make up for the additional cost.
Umbrellas that sold for $7 last year now go for $10.
“So when Trump says that China is going to pay for that, that’s wrong. Actually, it looks like the importers are going to pay but at the end, who’s going to pay, the consumer,” said Chen.
Chinatown stores across the United States will likely have to raise prices soon if they haven’t already to deal with the increased tariffs. But import experts said tariffs aren’t their biggest challenge right now. Delays are – thanks to the trade war.
“They’re backed up right now. We have shipments sitting there for weeks and the storage is at the importers’ cost,” said John Duffield, Chen’s customs broker, who has serviced Chinatown for roughly forty years.
He said shipments from China are much more heavily scrutinized today than they were two years ago causing significant delays.
“That quite possibly might be even more of a significant overall cost factor in the end than the 25 percent duties. We have to see,” said Duffield.
Duffield said Chinatown store owners aren’t panicking yet but they are having to make adjustments including sourcing goods from other countries like Vietnam and Cambodia and raising prices.
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