New york City’s iconic souvenir shops, purveyors of I ❤️ NY merchandise and miniature landmarks, are facing a growing crisis. Increased tariffs, especially on goods imported from China, are squeezing profit margins and forcing owners to make challenging decisions. The situation is further complicated by a tourism sector that has yet to fully recover to pre-pandemic levels,with recent forecasts predicting a decline of 3 million visitors this year.

The Price Squeeze: A Balancing Act

Tarun Karmaker, owner of Little Italy Gifts Center on Mulberry Street, exemplifies the challenges. He is grappling with the dilemma of whether to raise prices and risk losing sales, or maintain current prices and accept lower profits. Nearly all of his wholesale suppliers have already increased prices by 10% to 25%. Even novelty items like imported Trump bobblehead dolls have seen a price hike of 50 cents, now costing $4.50 each.

Karmaker lamented the widespread price increases, stating, You can ask me which one didn’t go up. After a moment’s thought, he pointed to a shelf of mugs, noting that the supplier for those items had not yet raised prices.

The Impact of Tariffs

The souvenir shops, heavily reliant on goods imported from China, are particularly vulnerable to the Trump management’s tariffs, which now stand at 145%. This has created a important strain on businesses that cater to the millions of tourists visiting New York city each year.

Owner Perspectives: A Divided View

Despite the financial strain, Karmaker has decided to maintain his current prices, accepting lower profits in the short term. A 2024 Trump voter, he believes the tariffs could ultimately benefit the country, even if they negatively impact his business. The tariffs should increase the revenue for the country.That will be bad for us but our country’s income will be better, Karmaker said.

However, not all shop owners share Karmaker’s optimism. Syed zaidi, who runs a gift shop on Broadway near the Charging Bull, plans to raise prices despite concerns about declining sales. Zaidi,also a Trump voter,expressed disappointment with the current trade policies. Should be decreasing the tariffs so the prices can go down and it will help the business community. That’s what I expected. But it’s going the other way around, Zaidi said.

Zaidi added,I think he’s a businessman and you know,he will help the business community. What he’s up to? I don’t know. I hope he has a plan as so far I don’t see any plan. This is not the plan he should be following. Despite his concerns, Zaidi is willing to give Trump a few more months before making a final judgment.

tourism Concerns and Broader Economic Impact

The tariff situation is compounded by broader concerns about the tourism industry in New York City. With tourism still struggling to reach pre-pandemic levels, the city’s tourism agency recently downgraded its forecast, projecting 3 million fewer visitors this year. There are also reports of tourists being detained by ICE, further deterring international travel to the United States.

survival Mode

Emran Raja, owner of I ❤️ New York & Italian Gifts in Little Italy, faces a similar predicament. He is dealing with increased supplier prices but cannot raise his own due to intense competition. If we increase our existing price, we cannot compete with other shops. We are trying to survive. That’s it, Raja explained.