‘Freaking out': California businesses are feeling the burn from Trump's tariffs

San Francisco Chronicle​

22-04-2025

A supermarket in San Francisco's Chinatown suffered plummeting sales due to rising prices of Chinese imports. A Bayview auto repair shop paid more for batteries and brakes. An almond farmer in the Central Valley has seen Chinese export demand for his goods evaporate.
California, the nation's biggest importer from and second biggest exporter to China, is already seeing the effects of President Trump's new 145% tariffs on Chinese imports and China's retaliatory levies on U.S. exports.
Economic and cultural ties to China run deep in the Golden State and those bonds are particularly strong in the Bay Area, the symbolic and literal gateway for Chinese businesses connecting to the American market.
'California's competitive advantage is being a coastal state and the gateway of trade to the U.S.,' said Sung Wook Lee, an import broker who serves as president of the Custom Brokers and Forwarders Association of Northern California.
But that could also be a weakness for the state with arguably the closest economic ties to China. It means California will have larger exposure to the impact of the U.S.-China trade war, which will almost certainly mean a rise in the price of goods, Lee said.
The Port of Oakland, which handles almost all shipments of containerized goods moving through Northern California, anticipates a 10% drop in cargo volume as a result of tariff impacts, said Robert Bernardo, a port spokesperson. The port, a major employer, supports 100,000 jobs.
In 2024, a quarter of California's imports came from China, including household appliances and computer, communications and electrical equipment. About 8% of exports went to China, mostly machinery, medical instruments, semiconductors, medicine, fruits and nuts.
Trump has long been a big fan of tariffs to reduce the U.S. trade deficit with China, which was $295.4 billion in 2024, but economists generally agree that tariffs aren't a good way to address it. He imposed up to 25% tariffs in 2018 on some Chinese goods, which Biden maintained.
In Trump's second term, he has issued a flurry of tariffs, including hitting all Chinese imports with 10% tariffs in February, doubling them in March, and raising it to a total of 145% in April, while promising to pause tariffs ondozens of other countries.
China has retaliated, raising taxes on American imports up to 125%. The chaos has been felt in California. The biggest risk, said Sean Randolph, senior director of the Bay Area Council Economic Institute which supports Bay Area-China trade, business and investment relations, is an 'almost complete cutoff in trade' between the two countries.
'The erratic nature of the tariffs and lack of clarity around what the end game is, that's causing a lot of companies to freeze up or delay decision making as long as they can over the long term,' Randolph said. 'That's not a good thing for the economy as a whole.'
Although China has a big enough domestic market that many companies won't be hurt by the tariffs, some Chinese companies are eyeing shifting production to the U.S. — just as Trump wants, said Darlene Chiu-Bryant, executive director of GlobalSF. That's because the U.S. is the world's largest consumer market by far.
Chiu-Bryant said she is a business consultant for some Chinese manufacturers of everyday consumer goods who have started looking to open factories in the U.S. to circumvent tariffs.
But ultimately, she said, the 'decoupling' of the U.S. and Chinese economies will be 'really unhealthy' for both countries as it'll mean loss of consumer choices, slower growth and higher prices.
Donald Luu, president of the San Francisco Chinese Chamber of Commerce, said that many local Chinese restaurants have already raised menu prices but that they're eating some of the tariff costs.
'This is going to be worse than during the COVID-19 pandemic,' he said, because those struggling won't get the federal stimulus dollars distributed during the pandemic to bring economic relief. He voiced concern for immigrants who depend on the nation's oldest Chinatown as an engine of employment and entrepreneurship.
'It's going to be less opportunities for new immigrants who need jobs when they come here,' he said. 'This trade war will always affect the little guys most.'
Hon So, owner of New Asia supermarket In Chinatown, imports most of his goods from China. He saw about a 20% drop in sales in the week after the biggest China tariffs took effect, he said. Even though he's raised prices between 15% to 30%, he's afraid hiking them further would drive away his customers, many of whom are lower-income Chinatown residents.
'They cannot pay that much more,' he said. 'They're all very worried.'
If the tariffs continue, he said he's worried his business — and Chinatown, which he said had just bounced back from the pandemic's economic downturn — will take a big hit.
Lee said the trade war not only hurts wallets but cultural ties in the Bay Area, where more than a quarter of residents are Asian American. That share is even higher in San Francisco with about 37% of residents identifying as Asian American.
'Many immigrant communities, including the Chinese, are somewhat disappointed that this particular trade gateway and their connection to their culture is being closed,' Lee said.
Other sectors are also feeling the hit, especially auto repair shops that import parts and machinery from China that are also subject to 25% steel and aluminum import tariffs, which took effect in March, Lee said.
Job Garcia, director of T-21 Auto Services and Repairs in San Francisco's Bayview neighborhood, said he's been paying more for car parts including brakes, car batteries and tires, and had to raise prices as a result.
He used to price tires at about $95 apiece. This month, due to tariff-related cost increases from his supplier, he raised his tire price to about $141. He used to sell up to 50 tires a week. He's down to selling 15 to 20 a week.
'I'm freaking out,' Garcia said. 'Definitely, small businesses are being affected.'
California farmers are being hurt just like other small business owners like Garcia. The state's farmers, which exported $1.4 billion worth of agricultural products to China last year, have seen blunted demand.
Peter Friedmann, executive director of the Agriculture Transportation Coalition, who advocates for agriculture exporters in D.C., said China's latest round of reciprocal tariffs on U.S. exports will cause significant damage because China isn't reliant on the U.S. for even its most prolific exports.
'We have nothing we produce in agriculture or forest products in this country that cannot be sourced somewhere else in the world,' he said. 'Almonds, walnuts, soybeans, lumber, pork, beef, anything — you can get it somewhere else in the world.'
The harms will be felt throughout the employment chain, he said, from farmers to truckers, from warehouse and cold storage facilities workers to port employees.
PJ Sandhu is a third-generation almond farmer in Tracy, a Central Valley city in San Joaquin County. The CEO of Crown Nut Co., said in the past two months, he's received no orders from China. The almond processing plant used to export 10% of its nuts, or about 4 millions pounds a year, to China. China's reciprocal tariffs have shifted demand from California almonds to places like Australia, he said.
Sandhu said business has already been tough since 2018, when Trump first imposed tariffs, but that the latest round of tariffs are 'ludicrous.'
'It is more or less killing the entire relationship. It's taking China and the billion people right off the map as far as almond consumption is concerned,' he said. 'The lasting damage the tariffs will do to the industry is incalculable.'