After taking office in early 2025, US President Donald Trump announced a series of new import tariff policies aimed at revitalizing domestic manufacturing. These policies caused difficulties for many businesses, particularly in major global manufacturing hubs. However, for Agilian Technology, a Chinese electronics manufacturer, the turbulent year of 2025 concluded with the belief that China remains a hard-to-replace location, provided things do not change too drastically.
Agilian primarily manufactures for Western brands, with orders from the US accounting for more than half of its revenue.
In 2024, as Mr. Trump gained ground in pre-election polls, Agilian's customers requested the company ship goods to warehouses in North America. Other US importers did the same, causing warehousing prices to surge.
Then, immediately after Mr. Trump's re-election, late-night calls became more frequent, according to Renaud Anjoran, Vice President of Agilian Technology. One customer with family in Penang, Malaysia, even urged Agilian to establish a production facility there.
Agilian subsequently established a legal entity in India. However, most customers did not support manufacturing there due to concerns about slow production and lengthy customs procedures. "It took us one year to complete the company setup in India", recalled Fabien Gaussorgues, Agilian's CEO.
 |
Employees inspect circuit boards at an Agilian Technology partner factory in Dongguan. Photo: Reuters |
After Mr. Trump took office, two rounds of tariff increases totaling 20% on China worried customers, but they continued to cooperate. By 2/4, Mr. Trump announced an additional 34% reciprocal tariff on Chinese exports.
For Agilian's customers, "this was a disaster." Many canceled orders. Not long after, their 12,000 square meter factory in Dongguan was filled with shelves of goods.
China's retaliatory tariffs against the US further escalated tensions. Tariffs imposed by both sides at one point exceeded 100%. "Everything froze", Anjoran said.
Beyond Agilian, the new tariffs plunged many other Chinese businesses into chaos. The country's Purchasing Managers' Index (PMI) showed manufacturing declined for most of last year. In April 2025, the PMI even dropped to its lowest point since December 2023.
Agilian then decided to choose Penang and found a partner factory to produce there. They also surveyed industrial land for lease in Dharwad, India, and even considered moving production to the US. However, Agilian found that the supply chain in the US was incomplete, still reliant on Chinese components, and had higher labor costs.
By mid-2025, Agilian found a 4,000 square meter workshop in India. They began discussing which products could be manufactured there. China's high tariffs made India more attractive to customers.
However, everything changed when an agreement between Washington and Beijing in May removed most tariffs on China. By August, with the Dharwad factory still not ready, Mr. Trump again increased tariffs on India by 50%, aiming to compel the country to stop buying Russian oil.
Nevertheless, Anjoran continued with the plan: "We want to become a multinational manufacturer. Look at the long-term trend." Trial production runs in Penang also began in mid-last year. However, Agilian realized that "everything takes a lot longer" compared to China.
In Summer 2025, China's export controls demonstrated the US's reliance on materials almost exclusively processed in Beijing. The US automotive, defense, and other sectors faced pressure due to component shortages.
By October, a meeting between Mr. Trump and Chinese President Xi Jinping helped reduce tariffs on Beijing by 10 percentage points. At that time, Agilian's customers no longer inquired much about tariffs or relocating production abroad.
Agilian reported that the second half of 2025 was their busiest period, measured by production hours, with a 29% increase compared to the first half of the year. With tariffs remaining high but acceptable, buyers reopened orders and placed new ones. Their annual revenue is around 30 million USD.
Gaussorgues stated that they will continue developing factories in India and Malaysia "as a contingency." However, the position of the factory in China remains a key factor for growth.
According to Reuters, analysts believe Beijing's retaliatory measures, including export controls on essential minerals and metals, helped alleviate import tariff pressure. In March 2026, China's PMI increased at its fastest rate in one year.
"The data shows that Mr. Trump's tariffs have not genuinely disrupted the growth momentum of China's manufacturing sector. The tariffs only led to a restructuring of trade links and supply chains", said Nick Marro, Asia Regional Chief Economist at Economist Intelligence Unit.
China's trade surplus in the first two months of 2026 was 213.6 billion USD, an increase from 169 billion USD during the same period last year. In 2025, the country's trade surplus grew by 20% to a record 1.2 trillion USD.
However, exports to the US decreased by 20% in 2025, harming manufacturers dependent on this market, Gaussorgues noted. He wondered whether Mr. Trump would achieve any breakthrough during his visit to China in May.
"The best-case scenario is for both sides to commit to continued dialogue and establish a framework to prevent trade tensions from escalating as they did last year", Marro said.
Economists and business leaders also hope Mr. Trump's visit extends the "truce" between the two economies. He Yadong, spokesperson for China's Ministry of Commerce, stated that the two countries need to implement what was agreed upon in previous meetings and subsequent rounds of negotiations.
Currently, Agilian's management considers Mr. Trump's tariff policies an experience for responding to future periods of tension. Gaussorgues expects the company's revenue to increase by 30% in the next three years, but also worries that Mr. Trump's policies could again cause obstacles. "In early January, I thought this could be a good year. Then the conflict in the Middle East erupted", he lamented.
Ha Thu (according to Reuters)
