Last year, more than 1.36 billion shipments entered the U.S. duty-free thanks to a long-standing trade exemption for low-value shipments of $800 or less. Not anymore.
That exemption expired just as the Trump administration hiked tariffs on imports — including produce and other household staples.
That leaves small businesses like San Diego’s Vien Dong Supermarket scrambling to manage rising costs.
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Owner Nicholas Tran has already felt the impact. He told Fox5 News that the wholesale prices he’s paying for his products are up 10%, “but 10% you can work with.”
For now, Tran says, his business will absorb some of the added costs to support customers living paycheck to paycheck.
“In the short term, we decided as a company to do this for the community,” he said.
But he acknowledges that he can’t sustain this in the long term, and he’s already raised prices on some items in the store.
Loophole closes, prices rise
For example, the store’s top-selling fish sauce is up 50%, now retailing for $8.99.
Regular customers like Emilio Danque are noticing the changes and having to make different — and sometimes tough — choices.
“(It’s) $5.99 for Dungeness crabs,” Danque said. “Now, it’s $10.99, so forget that, I’m not eating that.”
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Tran is exploring alternative suppliers from other countries to replace Chinese imports.
“All this is short-term strategy, so it’s on the fly,” he noted.
The situation at the Vien Dong Supermarket is a case study in how the tariffs are impacting grocers and their customers across the country.
With the loophole closed, grocers are paying tariffs on imports of everyday products like bananas, tomatoes, avocados and cucumbers. In turn, they have no choice but to pass these costs on to consumers.
And if that weren’t enough, the broader economic context exacerbates these challenges.
The broader economic picture
According to the U.S. Department of Agriculture, food prices have risen by more than 20% since 2021 due to inflation, labor shortages and fuel prices.
Add in the new tariffs to already inflated prices, and lower- and middle-income families could really see their household budgets strained.
Take the cost of a staple like bananas. CNN reports that Affiliated Foods, a wholesaler in Texas that serves 700 independent grocers in the U.S., is implementing a 10% increase to the wholesale price of bananas — imported from Guatemala — due to tariffs on products from that country.
That cost increase will likely be passed on to shoppers. But Tran is still finding ways to stay the course, for the good of his customers.
“When you’re lonely and homesick for your country, if you can eat a dish (from there), then you feel a little bit of your country, and so that’s why we’re very passionate about food because it’s the quickest way to our hearts."
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
