‘We are helpless’: How Trump’s tariffs are hitting one Chinese factory owner

DONGGUAN, China – Women in blue cloth hairnets sew the finishing touches on plush pink piggies and orange stuffed foxes before tossing them onto giant piles in Ms Maria Liao’s factory in southern China.

They will be boxed and shipped to the United States, where many of her clients are based.

The factory is quieter than it should be.

Orders are down in 2025, as Ms Liao’s customers hesitate in the face of a

succession of tariffs

that US President Donald Trump has put on products coming from China, another round of which will probably come this week.

The duties have upended small businesses in the US that depend on factories in China to build the things they design and sell.

The tariffs are also reverberating on the other side of the ocean in two-floor factories like Ms Liao’s Dongguan Yarunli Toys.

“We are helpless,” said Ms Liao, 33, who runs the factory with her older brother. “I don’t know what the next quarter will be like.”

Ms Liao is one of millions of people in China who sew, cut, build and assemble the toys, clothes, tools and cars that Americans use every day.

The work they do allows companies to make and sell things to households in the US quickly and cheaply.

With its US$1 trillion (S$1.34 trillion) global trade surplus, China remains the world’s manufacturing powerhouse.

But Ms Liao’s struggles show how Mr Trump’s tariffs, which include a base of 20 per cent on all goods, are challenging a long-held truth in China.

The US may no longer be the main destination for products made by small businesses such as hers.

One of Ms Liao’s customers, who sells toy dolls based on characters from a book, recently asked for a 20 per cent price cut – something she said she could not accommodate.

She makes a 30 per cent profit margin on the goods she produces, a cushion that allows for the fluctuation of costs for material and labour.

Such a steep cut in prices would wipe out most of her profit, making it difficult to continue operating, she said.

Still, it was not easy for her to say no.

In 2024, that customer ordered 25,000 toy dolls – one of the biggest single orders Ms Liao received. This year, overall orders are down nearly 30 per cent, she said.

For hardworking Chinese businesses that had long tied their prosperity to the demands of American customers, Mr Trump’s aim to sever trade ties with China is forcing a more urgent question: What next?

It is a hard one for Ms Liao to answer.

For starters, American companies make up 30 per cent of her export business. She also values the harder-to-measure cultural benefits she has gained from trade with the US.

Working with US businesses has changed her outlook on everything, from how she conducts business to how she sees her place in society.

Ms Liao started her factory with her brother in 2019 after five years of working at another toy factory and helping to find new customers.

She said she had been more reserved when interacting with clients.

But then she started working with American business owners who were direct and open about everything, right down to their personal lives.

One customer, in particular, has had an outsize influence on her life, Ms Liao said.

Ms Erica Campbell’s Phoenix-based company, Be A Heart, has been a client of Ms Liao’s since the beginning.

Her orders for Jesus and Mary dolls have made up one-10th of Ms Liao’s work.

In that time, Ms Liao and Ms Campbell, 36, each gave birth to their first children.

Their personal lives have become intertwined with conversations about business collaborations and product designs.

Ms Liao said it was the first time she had known a woman who juggled family duties and her own business.

In their conversations, she said, Ms Campbell would sometimes describe finding time in the middle of the night to draw a design for the next product.

Seeing a woman juggle work and home gave her the confidence to keep working after her daughter’s birth, Ms Liao said.

A few months ago, Ms Liao messaged Ms Campbell to tell her that business was really slow, weighed down by the worsening trade tensions between China and the US.

She was trying to figure out how to keep things afloat. In response, Ms Campbell shared her own challenges.

“I’m flailing,” Ms Campbell wrote back. One of her employees had just left unexpectedly, and Ms Campbell had recently given birth to her third child.

“Motherhood is kicking my butt,” she said.

Then she had an idea. Ms Liao could take over some of the work that the employee had been doing, sourcing materials and communicating with other factories in China.

“She did it so well,” Ms Campbell said.

When Ms Campbell finally placed her 2025 Christmas production order with Ms Liao a few weeks ago, it was half the size of her order in 2024 because of the uncertainty over tariffs and a recession, something Mr Trump has said is possible.

For now, Ms Campbell plans to shoulder most of the tariffs and pass some of the cost on to her customers. But if tariffs go above 20 per cent, she said, she will have to talk to Ms Liao about what to do next.

It will be a difficult conversation. Ms Campbell said she does not feel comfortable asking her Chinese partner to take on costs that Ms Liao has no control over.

“We are often dealing with the same small-business stressors and have had to navigate so much,” Ms Campbell said. “People like to create this divide, but we are the same and were just born in different countries.”

To Ms Liao, if everyone raises their costs to soften the blow of tariffs, it could lead to a situation she would prefer not to confront: “We may not be able to serve American customers.” NYTIMES