After 35 years, Neo-China, one of Durham's oldest Chinese restaurants, has closed its doors.
The family-owned restaurant grappled with increasing inventory prices caused by the 145% tariff the U.S. imposed on Chinese goods in April. Since then, the trade war has de-escalated and a 90-day pause has been put on a tariff that was lowered to 30%. Last week, the U.S. Court of International Trade blocked President Donald Trump from imposing sweeping tariffs on imports, which was quickly followed by an appeals court ruling that would allow the president to continue collecting tariffs under an emergency powers law.
Small business owners like Neo-China's Jordan Wang say they feel incredibly frustrated by the ordeal caused by the tariff and disoriented by the uncertainty around what could happen next between the two countries.
"The tariffs and the economic chaos of this year is the nail on the coffin," said Wang, who had already been dealing with rising operations costs from running an aging restaurant. "It eliminated a path forward where I might have to struggle and bounce around, but I could keep the business together and eventually build it back up … I basically had no more knowledge about what to expect going forward."
Wang said prices of imported Chinese goods have leveled off, but the costs are not sustainable for his business. Since Neo-China operates on thin margins and cannot easily substitute ingredients, such as particular kinds of Chinese soy sauces, for ones made domestically for their recipes, he decided to sell the business that his grandmother and relatives built.
That said, Wang has some optimism for the future of Neo-China's space. While he had hoped to revive his family's restaurant after purchasing it two years ago, he sold it to a company that operates Asia Pot in Raleigh and plans to work with them to build a new restaurant that he hopes will appeal more to younger generations.
"I feel like we're still continuing the Neo-China dream," he said. "It'll just look different, with different packaging. It's going to (have) a completely different menu and basically put this place back on the map like I intended to from the beginning. The vision is for the place to return Neo-China to what it used to be back in the nineties and early 2000s when we were in our heyday."
Wang still anticipates navigating challenges with the U.S.-China trade war with the new restaurant, but said that working with a restaurant group would mean that he wouldn't have to weather those costs alone.
Andrew Greenland, assistant professor of economics at North Carolina State University, said a restaurant group is more likely to better handle the challenges posed by high tariffs.
"If you have one big group working the whole thing out, then they can spread those big costs over more restaurants but still have access to those supplies," Greenland wrote in an email to WUNC.
Wang said construction of the new restaurant would start immediately after closure, with plans to reopen in August. He hopes that the timing of the reopening will attract students coming back to campus for the next academic year.
We're interested in hearing from small business owners and patrons of businesses concerned about increased tariff rates. Please reach out to producer Eli Chen at elichen@wunc.org.
