AANHPI businesses are hurting as Trump's tariffs take a toll on household budgets

Asian grocery owners are being impacted by Trump's tariffs.

Have you seen the price of jasmine rice lately?  Yikes! How about the cost of coffee? Double yikes!

The tariff is not being hurting the Thai rice growers. The 19% tariff is being paid by the rice importers and by the time it reaches the grocery story, that added cost is being passed on to the American consumers.

Just as disconcerting: Tariffs on imported coffee, such as those implemented by the Trump administration on countries like Brazil, Vietnam, and Indonesia, increase the cost of raw coffee beans for US roasters and retailers. Because the US imports almost all of its coffee, these elevated costs are often passed on to consumers, resulting in higher prices for their morning cup of coffee whether or not you brew your own java or you opt to buy a latte at Starbucks

Coffee businesses have limited options to absorb these costs, sometimes leading to price increases, and while there are efforts to exempt coffee from tariffs, they face challenges in implementation.

Major coffee-exporting nations face significant US tariffs, including 50% on Brazil, 20% on Vietnam, and 10% on Colombia. These high rates are exacerbating existing price pressures due to factors like global supply issues and weather.

Coffee companies and roasters initially absorbed some of these increased costs, but are now forced to raise prices. This creates tension between needing to cover costs and risking customer loss. Some businesses are transparently showing the impact of tariffs on customer receipts.

Trump's tariffs are significantly impacting Asian American-owned businesses, many of which import goods and ingredients from Asia. 

“President Trump promised to lower costs on day one, yet costs have skyrocketed due to his tariffs — especially for the over three million Asian American, Native Hawaiian, and Pacific Islander-owned businesses across our nation,” said Rep. Grace Meng, chair of the Congressional Asian Pacific American Caucus.

“These mom-and-pop stores are being forced to make an impossible choice: raise prices or close their doors for good. We refuse to be treated as collateral damage in the administration’s trade wars, and CAPAC will continue fighting for lower costs and a more affordable America.”

This has resulted in several negative effects:

• Increased Costs and Prices: Businesses are facing higher costs for imported goods, including agricultural products, cultural items, and traditional medicines that are not produced domestically. Some businesses, especially in Chinatowns, have reported increasing prices for their products by an average of 50% to absorb these higher costs, while others have seen costs for specific items, like medicinal oils, skyrocket from $500 to $13,000 per shipment overnight.

• Reduced Demand and Sales: Higher prices are leading to lower consumer demand as customers, including seniors on fixed incomes and working-class Americans, cut back on purchases. Businesses have seen sales decline and customers buying fewer items.

• Threat to Survival: Many Asian-owned small businesses operate on thin margins and are still recovering from the pandemic. They are facing the difficult choice between raising prices, which deters customers, or risking closure. Some are considering shutting down or laying off workers.

It is not just jasmine rice, Trump’s tariffs affect the price of basmati rice, grown primarily in India and Pakistan. 

Other items that will include higher prices iniclude: beef, shrimp, salmon, tuna, tilapia, dried fish, ginseng, Goji berries, Korean and Japanese cosmetics and skincare products, traditional Chinese medicine, matcha, loose-leaf tea, soy sauce, oyster sauce, hoisin sauce, Sichuan peppercorn, black pepper, cumin, turmeric, chili powder, paneer, kimchi, dry noodles, joss papers, incense, takeout containers, cell phones, computers, clothing, shoes, and more.

SHUTTERSTOCK

AANHP shoppers feel the pinch at their favorite Asian American groceries.

Tariffs spark anti-AANHPI sentiment

On August 29, a federal appeals court ruled that most of Trump’s tariffs are illegal but allowed the tariffs to remain in place while the case moves through the appeals process. The Supreme Court recently agreed to consider the appeal on an expedited timeline. Meanwhile, tariffs continue to create uncertainty for small businesses and consumers—including for Asian-owned businesses that import agricultural goods, cultural products, and traditional medicines that cannot be produced domestically.

Asian American entrepreneurs own 11% of small businesses in the US and nearly 20% of restaurants that can be found in 70% of counties across the country. Chinatown businesses in particular have reported lower demand and increased costs for goods, with some hiking prices by an average of 50%. According to the latest Consumer Price Index (CPI) report, consumer prices rose 0.4 percent in August, driving the annual inflation rate to 2.9%, the highest since January, in part due to Trump’s tariffs.

Grocers that cater to Asian consumers like H Mart, 99 Ranch, Seafood City, and Island Pacific, import over half of their items from Asia are now forced to raise prices in response. Consumers are cutting back on salon visits in order to save money due to rising costs from tariff policies, with 42 percent of typical salon patrons going less in the last six months in favor of at-home treatments and 24 percent giving up those services entirely.

Many Asian-owned businesses have not recovered from the pandemic and already operate on thin profit margins. These businesses cannot afford to absorb higher costs from Trump’s tariffs, but are hesitant to raise prices, especially for seniors living on fixed incomes and working-class Americans. 

These uncertain economic conditions come on the heels of Trump’s Big Ugly Law that makes life harder for working families by kicking more than 15 million people off their health insurance and raising the costs of food and utilities.

Zooming out from the impact on Asian American businesses, the pressure from tariffs is not only financial but also threatens the cultural fabric of ethnic enclaves like the nation's Chinatowns, where many small, immigrant-owned businesses depend on imported goods from clothing to the trinkets sought by tourists as souviniers.

There is also the fear that the broader economic uncertainty will spill over to an already strained environment for Asian American communities, who also face racist  rhetoric emanating from tariff debate. The last time that occured was during the pandemic when nonAsians blamed COVID19 Asians and Asian Americans resulting in a surge  attacks on people of Asian descent and an environment of racist hate that still lingers to this day. 

This fear is rooted in the history of linking trade and economic issues with anti-immigrant and xenophobic rhetoric, which has historically been associated with surges in violence against Asian Americans, Native Hawaiians and Pacific Islanders (AANHPI).

Political rhetoric surrounding tariffs can transform immigrants and foreign countries of origin into targets, making them scapegoats for broader economic problems. According to the organization Stop AAPI Hate, this type of political scapegoating is dangerous and increases the risk of violence. 

'Rice is life'

Despite being major rice producer, the Philippines can't grow enough rice for its own needs. Therefore, the Philippines is the world's largest rice importer. The U.S. Department of Agriculture (USDA) projected Filipino rice consumption to be around 151.3 kilos per person annually in early 2024, with a total consumption volume increasing from previous years.

Filipinos have a saying: "Rice is life." In the Philippines, rice is eaten with every meal, breakfast, lunch, dinner and throw in the mid-afternoon merienda. Rice is more than just food for sustenance; it's deeply intertwined with Filipino culture, family, celebrations, and even language, embodying a cultural preference that makes a meal feel incomplete without it.

Like many AANHPI consumers, I start my day with a good cup of coffee and end it with a healthy portion of hot, steamed rice with my meal. But with with both food staples going up in price (Thanks, Trump's tariffs), I might have to cut back a bit. But, what the heck! Who am I kidding?

EDITOR'S NOTE: For additional commentary, news, views and chismis from an AANHPI perspective, follow me on Threads, on X, BlueSky or at the blog Views From the Edge. 

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