How a Chinese manufacturer weathered Trump tariffs and global trade disruption

Agilian, which makes products mainly for Western brands, depends on US customers for more than half of its revenue. When tariffs on Chinese goods surged last year, many American clients paused orders and pushed the company to build capacity elsewhere. Pallets of finished goods piled up at its Dongguan factory as levies climbed above 100 percent on both sides during the sharpest phase of the trade war.

The company moved quickly to prepare alternatives. It explored production in Penang, Malaysia, and Dharwad, India, while also examining whether any work could be shifted to the United States. But each option exposed the same problem: China’s ecosystem of suppliers, logistics, speed, and labour coordination was difficult to reproduce. Executives said India involved slow approvals and customs headaches, while US production still relied on Chinese components and carried much higher labour costs. Malaysia looked more promising, but even there, early trial runs showed how much longer everything takes outside China.

Agilian’s experience mirrors a wider pattern across Chinese manufacturing. Trump’s tariff offensive caused real disruption, and China’s official manufacturing index contracted through much of 2025, with April marking the weakest reading since December 2023. But the shock did not produce the collapse many had expected. China responded with export controls on strategically important minerals and metals, and by early 2026 tariffs had eased from their peak. In March, China’s official manufacturing purchasing managers’ index rose to 50.4, its strongest level in a year and back into expansion territory.

Trade data also pointed to resilience. China’s trade surplus for the first two months of 2026 rose to $213.6 billion, up from $169.21 billion a year earlier. For all of 2025, the surplus hit a record $1.189 trillion, even as exports to the United States fell sharply. In effect, the country lost part of the US market but made up ground elsewhere. That pattern has strengthened the view among many manufacturers that the bigger change was not decoupling, but a restructuring of trade routes and supply chains.

At Agilian, the recovery gathered pace in the second half of 2025 after Washington and Beijing reached a deal in May that rolled back most of the steepest tariffs on China. Orders that had been frozen began to move again. The company said production hours in the second half of the year rose 29 percent from the first half, making it the busiest stretch in its history. Clients who had spent months demanding offshore plans became quieter once tariffs fell back to levels they could absorb.

That does not mean the danger has passed. Agilian is still building its Malaysia and India options as an insurance policy in case tensions flare again. Its executives now treat Trump’s trade policy as a permanent strategic risk, not a temporary political shock. The company wants to become a multi country manufacturer, but it no longer sees that as a substitute for China. It sees it as protection against another sudden freeze.

For now, the lesson from Dongguan is blunt. Tariffs can disrupt Chinese factories, squeeze margins, and force costly diversification. But replacing China’s manufacturing depth remains far harder than many buyers imagined when the trade war reached its peak. As Agilian looks for 30 percent revenue growth over the next three years, its future may be more diversified. Its center of gravity, though, remains in China.