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How China adapts while U.S. businesses pay the price amid Trump's tariff war

U.S. President Donald Trump arrives to speak on his first 100 days on April 29, 2025, local time, in Warren, Michigan. (Photo: CFP)

"Tariffs are about making America rich again and making America great again."

— U.S. President Donald Trump, Joint Address to Congress, March 6, 2025

However, the U.S. economy has come under mounting pressure during the first 100 days of Trump's second term which began on January 20, amid escalating trade tensions. The S&P 500 has dropped more than 7 percent, while the tech-heavy Nasdaq Composite has plunged 11 percent.

China remains the primary target of Trump's tariff onslaught—measures he claims will revive domestic manufacturing. His administration has imposed new duties of up to 145 percent on imports from China, warning that when combined with existing tariffs, the total burden on some products could soar to a staggering 245 percent. Meanwhile, a blanket 10 percent tariff on imports from other countries is set to remain in place through at least July.

But across the Pacific, in Chinese factories and export hubs, what we see isn't collapse—it's adaptation, innovation, and a quiet, confident reshaping of global trade.

China shifts gears as tariffs bite

In Zhongshan, a major hub for home appliance manufacturing in South China's Guangdong Province, Ricky Liang walks us past rows of boxed ovens labeled for sale through American retail giants like Amazon, Target, and Walmart—all frozen in limbo.

"Everything was stocked, and then all was stopped," he says. But there's no panic. "We need to expand in Vietnam. Also, Africa, ASEAN, and the Middle East," he explains, listing alternatives with the steadiness of a seasoned strategist. "We cannot only focus on the U.S. It is terrible. We have to spread all the risks."

Ricky Liang's company, Guanglong Gas & Electrical Appliances, has taken the hit from Trump's tariffs and kept moving. They're investing abroad, but not abandoning China. 

"This is where we were born and raised," says CEO Andy Liang. "We never planned to give up here." They are adjusting strategy: export not only finished products, but entire packages—technology, management expertise, and supply chains. 

In Foshan, another manufacturing powerhouse in Guangdong, Golden Source Precision Manufacturing has seen American orders dry up. One of their major clients—an auto manufacturer that exports to the U.S.—pulled the plug. "Trump makes a new announcement almost every day. No one knows what he really wants," says Vice General Manager Wang Shunli. 

Yet here too, resignation gives way to resilience. "We believe China's system is too massive to be easily dismantled," Wang says. "And we believe in our resilience. That's our faith." Golden Source has already sent executives to Malaysia to explore new markets, confident that the fundamentals of Chinese manufacturing remain strong.

Even in the niche world of packaging, confidence abounds. In Guangzhou, Guangdong's provincial capital, Jackie Chen, affectionately known as "the man of boxes," used to count the U.S. as part of his client base, which made up five percent of his market. Now he shrugs off their loss. "If we lose them, we focus on Europe, South America, the Middle East." 

He takes pride not just in price, but in product design and service. "We're not just the copy guy. We innovate. We design boxes that last for years." When an American buyer asked for a 30 or 40 percent discount to offset tariffs, Chen simply said no. "They couldn't accept the new price. But I can't accept a loss."

U.S. small businesses feel the squeeze

Back in the U.S., the damage is less about headlines and more about livelihoods. Ryan Hill, a San Francisco-based fashion entrepreneur, has been sourcing from China for 15 years. Now he has paused all orders. 

"No profit left. None," he says. His small business—like many others—is being strangled by the new tariffs. "Most of my friends in fashion are basically just gonna close their business."

Relocating supply chains isn't as simple as politicians suggest. "I don't speak the language in other countries. I don't know any factories there. So it's almost not worth the effort," Hill says. Trust takes years to build. And skilled labor in the U.S. is scarce. "We don't have that. College students don't know how to use a sewing machine."

Worse still, consumers will feel the pinch. "The stock under the old tariffs will run out in a month or two," Hill says. "That's when the prices are really gonna go up."

Trump has vowed to revive American manufacturing and “make America rich again” through sweeping tariffs, but the reality seems to be moving in the opposite direction.

Goldman Sachs Research has downgraded its forecast for U.S. GDP growth in 2025 to just 0.5 percent, while its economists have raised the likelihood of a recession within the next 12 months to 45 percent.

Outside Trump's 100-day rally at a community college in Michigan, protesters held upside-down American flags and signs that read: "I dissent." A Reuters/Ipsos poll shows his approval rating slipping to 42 percent, with just 36 percent supporting his economic policies.

"I think a lot of Trump's followers accept what he says—that there has to be pain to make progress," Hill says. "There's gonna be inflation, there's gonna be a rough period while the tariffs are implemented. But in the long run, things are supposed to get better."

And yet, that is not the case. Hill adds, "The problem is, a lot of his supporters don't really know how the economy works. They don't have the education to form their own view about what the reality of the situation is."

Reported by: Liu Xiaodi, Yuan Zixiang, Xie Hongzhou, Guo Zedong

Edited by: James, Shen He

Ouyang Zixuan (intern) also contributed to the story.

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