Factory at the Center of Trade War

A Chinese electronics manufacturer, Agilian Technology, has emerged as a key example of how businesses are adapting to ongoing trade tensions between the United States and China. The company, heavily reliant on US clients, faced significant disruptions when tariffs imposed by US President Donald Trump sharply increased.

At one point, more than half of the company’s revenue was impacted as US orders were frozen and clients demanded production shifts خارج China.

Impact of Trump Tariffs

The tariffs, including a sharp increase in 2025, created chaos for manufacturers. Orders were canceled, goods piled up in warehouses, and uncertainty spread across global supply chains. In some cases, tariffs between the US and China escalated beyond 100% on both sides.

China’s manufacturing sector also saw declines, with factory activity hitting weak levels during the height of the trade tensions.

Shift to Alternative Locations

To reduce dependence on China, the company explored setting up operations in countries like India and Malaysia. However, these efforts faced challenges such as slow approvals, logistical delays, and weaker supply chain ecosystems compared to China.

Attempts to move production to the United States were also deemed impractical due to higher labor costs and reliance on Chinese components.

Recovery and Resilience

The situation began to improve after China responded with export controls on key materials, which pressured US industries and led to a partial easing of tariffs. As tensions stabilized, orders resumed and production rebounded strongly in the second half of 2025.

China’s manufacturing sector also showed signs of recovery, supported by strong export performance and supply chain advantages.

Lessons for Global Supply Chains

The experience has highlighted the difficulty of replacing China’s manufacturing ecosystem. Despite diversification efforts, companies continue to rely on China for efficiency, cost advantages, and access to high-quality components.

However, businesses are increasingly adopting multi-country strategies to hedge against future geopolitical risks and trade disruptions.

Conclusion

The case of Agilian Technology underscores how global companies are learning to adapt rather than relocate entirely. While Trump’s tariffs reshaped supply chains, China remains a critical hub in global manufacturing, with firms balancing resilience and risk management in an uncertain trade environment.