From Chinatown grocers to local winemakers, Trump’s tariffs are reshaping the economy 

President Donald Trump’s policy of blanket tariffs on pretty much every country the United States does business with has sent shockwaves through the global economy and propelled the stock market into a tailspin. 

For Bay Area businesses, the overriding effect has been uncertainty and fear of higher costs, with little clarity about what’s next. 

The president argues that the short-term pain of his “Liberation Day” actions is necessary to reset what he considers unfair trade practices. What is clear is that the tariffs will raise prices on pretty much everything you buy on a daily basis.

The thing about U.S. manufacturing is that it still relies on foreign-made materials. 

This is true across industries, but especially in clothing, where large-scale manufacturing of clothes and their components has been almost entirely outsourced to countries in Asia and Latin America.

“Most U.S. [clothing] factories are relatively small operations,” said Wes Allen, owner of the Oakland outdoor and menswear shop Understory, which GQ recognized as one of the 100 best clothing stores in the world. “There’s no infrastructure set up to support big companies trying to do that.”

Even small companies that pay extra to use U.S.-made materials need to get certain components, like buttons, from abroad.

“I wish I could say there was something that would be tariff-proof,” said Brody Nowak, co-owner of Rising Star Laundry in Cole Valley. Even a brand he stocks that uses factories in the Midwest won’t be safe, he said. “They stay about as true as you can to 100% U.S. manufacturing and sourcing, and even they can’t do it all.”

So what does this mean for Bay Area consumers? Higher prices. 

“In the apparel industry, you’re buying nine months out, so we’ve already made orders for the rest of the year,” Nowak said, adding that most of the brands his store carries are from other countries. “It’s like, well, you can’t adjust it now. You’ve already signed a contract.”

Stores like Understory and Rising Star Laundry, already working with slim margins, are forced to pass these cost increases — as much as $5,000 on a single brand order, Nowak said — to customers. 

“These extra costs tacked on to fall orders will hit hard,” Allen said. People are also just less likely to be in a shopping mood.

“The overarching issue is that when we’re in a recession, and the economy tanks, people stop buying clothes,” he said. “Whether a shirt is $200 or $300 doesn’t matter if everyone is laid off and broke.”

San Francisco’s thriving brewing scene, a network of small producers, are the type of local businesses that protective tariffs are intended to uplift. However, Trump’s taxes on imports extend to the raw materials that go into or package locally manufactured goods. 

For example, the administration is implementing a 25% tariff on empty aluminum cans. The U.S. imports the majority of its aluminum from Canada and Mexico.

Justin Catalana, CEO of Fort Point Beer Company, said that with so many unknowns associated with the tariffs, he can’t predict the long-term effects on his business, which sold about 70% of its beer in cans, versus on tap, in the past quarter. 

“The margins on beer are already tight. Should the new tariffs on aluminum — and now aluminum beer cans specifically — remain in play, we’ll likely see prices increase across the industry,” Catalana said. Even though it sources its cans from Ball, which manufactures in the U.S., it will feel tariff pain because so much raw aluminum is imported. 

Ed Gobbo, cofounder and brewmaster of family-owned Harmonic Brewing, said the taproom’s local versus distribution-heavy focus (and the fact that it sells most of its beer on tap, not in cans) largely safeguards it from the aluminum tariff. But, he notes, costs will increase across the board.

“This increase really hurts in an industry that has seen a decline in the past few years,” Gobbo said. 

It’s not just the caffeine: The price of your morning cup could soon give you the jitters, thanks to tariffs applied to Colombia, Vietnam, Indonesia, and other major bean-producing countries. 

Corazon Padilla, director of coffee quality and sourcing at Andytown Coffee Roasters, said the tariffs couldn’t have come at a worse time. “It destabilizes everything,” she said. 

The industry had already been feeling the heat this year thanks to lower global production: In February, the price of coffee futures reached an all-time high, doubling the price of commodity coffee year-over-year. Specialty beans, like those roasted by Andytown, cost even more. 

The company already operates on thin margins and would likely have to pass higher costs to customers, according to Padilla. A latte that sells for $6.25, might cost 10% more. The tariffs could also cause unexpected ripple effects; for example, workers might need pay raises to make ends meet, which could translate to higher overall prices for customers.

“A lot of us in the community are talking to each other and trying to prepare for the worst,” Padilla said. 

If the tariffs take effect at their proposed levels, the cost of both fresh coffee and bagged beans will increase. The cost of the bags will too, Padilla adds. “We have a shipment of the retail bags that we put our coffee in that is afloat right now from Taiwan, and we don’t know if the tariff is going to apply on it.”

“In general, coffee is one of the things that people are willing to pay more for,” she noted. “But I’m afraid it’s going to come to a point where too much is too much.”

That could mean people will drink less coffee or water down their cups to make the beans last longer, she said. For now, the roastery’s best hope is that Trump’s tariffs, like others in the past, won’t stick: “We’re trying to stay updated but not panic.” 

Max Nicholas-Fulmer, CEO of Emeryville-based importer Royal Coffee, said the tariffs are putting an already volatile industry on a bumpier road.

“Coffee does not, and cannot, grow in the continental United States. There is no domestic industry to protect or jobs that will be created to offset the increased costs,” he said.

Mill Lei is worried. The owner of the Chinatown grocery and general shop Jumbo Trading Co. already saw prices surge this year when Trump imposed a 20% tariff on imports from China, including specialty tea, medicine, and kid-favorite snacks. “We sell cookie snacks that were $30 a carton two months ago; now they’re $36.50,” Lei told The Standard in Mandarin. “We don’t know what’s going to happen.”

She said some of her distributors once offered “buy 10, get one free” promotions on inexpensive goods imported from China, such as noodles and soy sauce, but those deals have disappeared. 

Now, with a 34% tariff being tacked on as part of the escalating trade war between the U.S. and China, she’s trying to hoard as much product as she can find at reasonable prices, even as she rapidly runs out of storage space.

“What we can do now is stock our inventory by buying as much as we can,” Lei said. 

Philip Ashizawa, owner of Soko Hardware, feels apprehensive when he considers the impact a 24% tariff on imported Japanese products could have on his shop.

Ashizawa is a third-generation business owner, and his store — which sells specialty goods like takoyaki pans, donabe clay pots, and lacquer trays — is the oldest still standing in Japantown.

He hasn’t gotten any frantic calls from vendors raising prices. But he said he’ll have no choice but to pass along higher costs to customers.

“There’s no way that we’d be able to absorb the increased costs,” he said. “It’s definitely going to increase prices.” 

Based on Trump’s general approach with other tariffs, which have included last-minute stays or negotiations, he’s warily optimistic that the tariffs will at least be lowered.

“We don’t know the final amount that will be imposed,” he said. “There’s a lot of uncertainty.” 

“Oh, shit,” RH CEO Gary Friedman said on an earnings call Wednesday afternoon as he watched his company’s stock price crater in real time. The Corte Madera-based luxury furniture retailer, formerly known as Restoration Hardware, was battered by a less-than-stellar earnings report and the public announcement of the administration’s new tariff policy.

According to the company’s 10-K annual report, the top two sources for its merchandise are Vietnam and China, which produced 35% and 23% of its total sales volume, respectively, in the last fiscal year. The two countries are among those with the highest tariff levels. 

“Anybody of scale in the home business has a high percentage of their content coming out of Asia,” Friedman said. 

Darryl Denny, co-owner of furniture seller Better Source, recalls a tour he took a decade ago at one of the company’s manufacturers in China. “It was a beautiful, 250,000-square-foot factory, but they’d already started planning to move to India,” he said. What seemed like prescience about increasingly chilly relations between China and the U.S. wasn’t enough to spare the company now. “Now, Trump just tariffed everybody.” That includes India, which will see a 27% tariff on exports to the U.S.

That means the cost of furniture will increase across the board, for both finished imported items and for “Made in America” products assembled from parts shipped from abroad.

“One of our biggest vendors just told us there’s going to be a 5% increase in prices. In the furniture world, that’s a lot,” Denny said. “And guess what? I’m not absorbing that 5%. It’s going to be pushed onto the customer.” 

A silver lining for Denny is that one part of his business might actually benefit because it sells used goods sourced from office liquidations. “I think used furniture is just going to become more attractive,” he said. With sky-high tariffs raising prices on new products, “used is probably [going to be] the only growth business in the office furniture world.”

Adrian Hoffman, cofounder and CEO of Four Star Seafood & Provisions, loves his job so much he lists his title on LinkedIn as “Fishmonger Extraordinaire.”

The former chef started his vendor business with a partner in 2015 to cater to restaurants needing high-quality ingredients. In 2020, they opened Billingsgate, a fish market and cafe in Noe Valley, as a brick-and-mortar enterprise. 

Among the international products he sells is bluefin tuna from Japan, fancy shrimp from Spain, and fish from the Maldives and Seychelles.

Hoffman is blunt in his assessment of the tariffs and their rollout: “It’s a shitshow, and it’s no good for anybody.”

He’s had some practice dealing with the chaos. A briefly instituted tariff on Canadian products earlier this year meant he lost money on a shipment of oysters, whose price jumped by around 25%. He asked the broker for a refund on the surcharge he paid after the policy was rescinded just a few hours later, but it was not forthcoming.

He does see the potential for targeted tariffs to make sense in specific industries where the U.S. could be capable of bringing back manufacturing jobs that went overseas; for example, electronics and auto parts. But in his business, there are just certain things you can’t find in the United States. 

“You can’t buy domestic Carabineros prawns; you can’t buy domestic Spanish octopus,” Hoffman said. The result? “Everybody who goes out to eat in a restaurant is going to pay more.”

New tariffs on Chinese goods are making a bad situation even worse for the U.S. solar industry, driving up costs for some components while raising concerns about supply-chain disruptions. 

Sutro Power cofounder John-Paolo Rapagnani says the immediate impact on his business has been minimal, with most distributors keeping prices steady. 

However, he has seen price hikes on certain U.S.-made materials, like mounting rails, as manufacturers brace for the tariffs’ effects on other products with across-the-board cost increases. 

He believes small, local solar installers may be better positioned to weather the changes than multi-state operations or U.S.-based manufacturers that rely on overseas production. “No one is manufacturing batteries in the USA — they’re going to get hurt by it,” he said.

For Luminalt Power CEO Jeanine Cotter, the tariffs add a layer of difficulty to an already challenging landscape. She points to high interest rates and financing barriers, especially for women- and minority-owned businesses, as additional obstacles. 

“It all makes life much more complex, much more uncertain when you don’t have clarity on what your future costs are going to be and when borrowing money is so much more expensive,” she said.

Despite the potential for rising costs and financial strain, both Rapagnani and Cotter remain confident in solar’s viability. In uncertain economic times, consumers may be even more eager to lower their electricity bills in the long term through solar installations.

Though you wouldn’t be wrong to assume that U.S. wineries could gain an advantage over those based overseas, they aren’t immune to the effects of tariffs.

Some essential elements of their products are imported, such as foils from France and bottles from China.

Jennifer Halleck, owner of Halleck Winery in Sebastopol, said she noticed an extra line on some of her invoices during the first Trump administration: an added fee, similar to a tax.

“It’s unfair to penalize us for buying cork from Spain when that’s the only place you can buy it,” Halleck said. “That extra line in the invoice will be whatever Trump decides the percentage is for that particular country.”

Trump on Wednesday announced plans for a 20% tariff on goods from EU countries.

In Halleck’s experience, the importer passes along the tariff fees to her, and she raises prices for consumers. But even in a potential economic downturn, high-end customers remain picky about what they like and largely insensitive to price. Americans will not be keen on abandoning French wine if it is their drink of choice, she noted.

Local merchant Tomorrows Wine buys about 80% of its product from Europe and hopes its importers will absorb half of the tariff costs, passing along only 10%, to avoid stifling trade. But the price of local wines will probably suffer, said co-owner Mark Nevin: “Even the distributors we work with who have strong domestic portfolios also have imported wines that will lose sales, so we imagine the cost of California wine will also increase to make up for the loss, not to mention the incredible impact of Trump’s immigration policies on vineyard workers.”

The longer the tariffs stay in place, the more everyone will be hurt, he added. “This is yet another challenge,” he said. “But to be totally honest, we are just as concerned about the real, generations-long damage that our president is doing to America … and for what?”