NYC shop owners ‘terrified’ as many brace for price hikes and economic uncertainty

President Donald Trump’s trade war continues to rock the global economy, threatening to reshape the way the entire world does business from multinational conglomerates down to New York City’s small businesses.

The broad strokes are familiar to consumers. Tariffs are a tax on imports, which means American companies pay higher prices and pass them along to consumers. And in a globalized economy, there is nowhere to hide: Even products that are “Made in the USA” are often just assembled here with components imported from elsewhere.

And yet, small business owners in the city are still finding new and surprising ways that the latest tariffs, many of which took effect Wednesday morning, will affect them.

“We have Wall Street here…but we also have a main street: more than 100,000 small and medium-sized businesses,” said Jessica Walker, who heads the Manhattan Chamber of Commerce.

Some spoke about a fear of closing for good and others described getting rid of their best-selling products, which are likely to skyrocket in price.

Here are five business owners on the unusual effects they are just beginning to navigate.

'We’re sitting on two days’ worth of higher-price items'

Brothers Freeman and Steven Wong took over Aqua Best Seafood from their parents, who started the Chinatown fish market 40 years ago.

“We service probably 80% of the Michelin-star restaurants here in New York City,” Freeman said.

Unlike clothing, or cacao, or other dry goods, Aqua Best can’t stockpile inventory before tariffs hit to try to avoid the price hike – they take shipments of fresh fish daily, including Norway salmon (15% tariff), Turkish branzino (10%), Greek dorade (20%) and Japanese red snapper (24%).

Because their inventory turns over so fast, the Wongs said, they are immediately exposed to price swings. That means that even if Trump changes his mind, a single day of tariffs will hit their bottom line.

“Back in March when the 25% Canada/Mexico tariff was in effect for two days, we paid that tariff,” Freeman said. “Two days later it went away – and now we’re sitting on two days’ worth of higher-price items.”

Freeman said his customers wouldn’t pay higher prices to offset his higher costs for such a short-term spike – his business simply had to eat the difference.

Losing unexpected revenue streams

Rhonda Kave and her partner Sharon Hoahing have been crafting high-quality chocolates and confections on the Lower East Side since 2007. Her suppliers import chocolate from Belgium and France (20% tariffs) and she sources cacao to grind on site from Ecuador, Peru, the Dominican Republic and a bean-to-bar chocolate factory she co-founded in Belize (all facing 10% tariffs).

Kave is making the same calculations about price changes and product substitutions as everyone else, but another impact is more immediate.

“One of our largest revenue streams is team-building for corporations,” Kave said. “The Financial District is close enough that we do lots of classes for financial companies that have new teams and interns coming in.”

Kave realized this week that perks like that will dry up as a result of the crashing stock market, where financial institutions have been hit especially hard – and cost her about $10,000 a month.

“Those classes cover basic expenses for the company, rent and utilities,” Kave said. “That’s a big chunk to have gone.”

Getting rid of your best-selling products

Kelly Wang opened her sustainable fashion boutique, Rue Saint Paul, just before the pandemic, and made it through. She stocks about 25 clothing brands each season, plus another 50 small accessories brands for candles and other gifts.

Around 70% of those products come from abroad, Wang said, including her best-selling “Janus pant:” a two-tone color-blocked trouser that sells for $220.

“People just can’t get enough of them, all seasons,” Wang said.

The pants are manufactured in China, which is facing tariffs of up to 104%, which means Wang would have to price the pants around $400 if she wants to maintain her margins.

Wang doesn’t need to adjust prices now, as she locks in orders six months in advance and has inventory on hand. But come August, she’ll have to place orders for winter.

A lot could happen by then, and while Wang hopes the tariffs will be dialed down, she can’t count on it. She’s looking at switching her mix of brands to hedge out tariff uncertainty – which means she may have to part with one of her best-selling items.

22% of shop owners already anticipated closing within two years

Few people know as much about the city’s local businesses as Caroline Weaver, who created the Locavore Guide to catalog independently owned stores within 100 miles of New York City. There are more than 14,000 shops in her database right now – and Weaver stocks many of their products at her own retail location in Greenwich Village.

“I don’t know a single shop owner in New York City who is not completely terrified,” Weaver said. “They’re scared they just aren’t going to be able to price things in a way that will keep their customers shopping.”

Weaver said that survey data about independent retail is scarce, so she’s been polling retailers across the country herself for several months. The data is preliminary, but so far 22% of shop owners who took Weaver’s survey said they anticipate closing within the next two years – and that was before the tariff announcements.

The supply chain for small stores has plenty of stops for middlemen take their markup along the way, from importer to wholesaler to retailer to customer.

The top of the chain bears the immediate impact of the price increase, which means margins are squeezed all the way along, leaving the retailer with the greatest burden to swallow cost hikes.

“Businesses are going to cut margins in order to remain affordable, and that’s going to decimate independent retailers long term,” Weaver said.

No substitutions for the real thing

Marvina Robinson was born and raised in Bedford-Stuyvesant, where she and her friends used to save up money to buy a bottle of Moet & Chandon from the liquor store and sip it out of plastic cups.

Years later, she turned her love of champagne into a business, growing grapes on a single vineyard in the region, which she ships over regularly. Despite being an American business with an overseas holding, Robinson pays full import duties to bring her product across the Atlantic.

“I sent a letter to the customs board explaining my situation, but [the tariff] goes into effect immediately,” Robinson said. “I have a shipment getting on the water next week and I’m just gonna take the hit.”

Robinson could switch to American grapes, but won’t. “I didn’t create this brand just to create a wine, it’s because I have a true love for champagne,” Robinson said. “I studied champagne, I spent a lot of time going.”

“It’ll never be B. Stuyvesant sparkling wine from the Finger Lakes,” Robinson said.

Giulia Heyward contributed reporting.