How one factory in China learned to live with Trump, tariffs and turmoil

DONGGUAN, China – U.S. President Donald Trump’s tariffs were designed to hit Chinese manufacturing, but for electronics maker Agilian Technology, 2025 ended with a renewed belief that China remains an irreplaceable manufacturing hub—as long as conditions don’t change drastically.

Agilian, which produces mostly for Western brands, saw its U.S. orders—which make up more than half its revenue—frozen for months. Clients pressured the company to set up production outside China.

The tariffs caused widespread disruption in China. The official purchasing managers’ index (PMI) contracted for much of last year, with April 2025 marking the weakest reading since December 2023.

But Beijing’s countermeasures—export controls on minerals and metals critical to U.S. firms—helped reduce the impact of the levies. By March 2026, China’s PMI had grown at its fastest pace in a year.

For Agilian, a $30-million-a-year business, this allowed a recovery and reinforced the value of its Dongguan base. Despite exploring offshoring, the company sees its Chinese operations as key to growth.

“The data confirms that Trump’s tariffs haven’t derailed momentum in China’s manufacturing sector,” said Nick Marro, principal economist for Asia at the Economist Intelligence Unit. He added that the levies “led to a restructuring of trade linkages and supply chains.”

China’s trade surplus for the first two months of 2026 reached $213.6 billion, up from $169.21 billion a year earlier. In 2025, the country’s trade surplus grew by 20% to a record $1.2 trillion—roughly the size of the Netherlands’ GDP.

Exports to the U.S., however, fell 20% in 2025, hurting manufacturers like Agilian, CEO Fabien Gaussorgues said. Speaking at his Dongguan factory, Gaussorgues speculated on whether Trump’s upcoming visit to China in May might ease tensions.

“The best we can hope for is a pledge to keep talking and a framework to prevent trade tensions from boiling over like last year,” said Marro. Economists and industry executives expect Trump’s visit to extend a period of detente.

He Yadong, spokesperson for China’s Ministry of Commerce, emphasized implementing previous agreements.

“China has shown rare earths are a leverage of mass destruction,” said Denis Depoux, general manager at Roland Berger. “It’s a nuclear weapon of trade.”

Preparing for the Worst

Agilian’s executives now view tariffs as guideposts for handling future disruptions. In 2024, as Trump’s election prospects rose, clients asked the company to ship products to North American warehouses. Storage costs soared.

After Trump’s re-election, panicked clients made frequent late-night calls. One customer even urged Agilian to establish a base in Penang, Malaysia. Agilian also explored India, but slow production and customs delays made clients hesitant.

“India takes time,” Gaussorgues said. “It took us a year to register the company officially.”

Tariffs Hit Hard

After Trump’s inauguration, two tariff hikes totaling 20% rattled clients, who initially stayed. On April 2, tariffs rose another 34 percentage points, causing order cancellations and a backlog at Agilian’s 12,000-square-meter Dongguan factory.

China retaliated, pushing levies above 100% on both sides. Agilian partnered with a factory in Penang, safer from South China Sea tensions, and scouted industrial space in India. Plans to move production to the U.S. were abandoned due to incomplete supply chains and higher labor costs.

By mid-2025, Agilian’s India team identified a 4,000-square-meter facility, but a May Washington-Beijing deal removed most tariffs on China. Later, Trump raised tariffs on India by 50%, further complicating plans.

“Focus on the long arc of time,” said vice-president Renaud Anjoran. Pre-production in Penang started mid-year, revealing that processes took far longer than in China.

Recovery and Growth

China’s export controls highlighted U.S. dependence on Chinese-processed materials, affecting autos, defense, and other sectors. An October meeting between Trump and Xi Jinping eased tariffs by 10 percentage points. By then, Agilian’s clients resumed orders.

The second half of 2025 was Agilian’s busiest, with production hours up 29% from the first half. The company continues developing facilities in India and Malaysia as a backup, but Dongguan remains indispensable.

Gaussorgues aims to grow revenue by 30% in three years but worries tariffs could disrupt plans again.

“I started the year optimistic, then the Iran war started,” he said.

-Reporting by David Kirton, Nicoco Chan, Tingshu Wang in Dongguan; Casey Hall in Beijing

Additional reporting by Joe Cash

Writing by Marius Zaharia

Editing by Thomas Derpinghaus / Reuters