China's Electronics Manufacturer Learns to Live with Trump Tariffs and Thrive

Employees work on a production line manufacturing electronic products at a factory of Agilian Technology, in Dongguan, Guangdong province, China March 16, 2026. REUTERS/Tingshu WangTingshu Wang

President Donald Trump's tariffs sought to hurt Chinese manufacturing, but for one electronics maker, a turbulent 2025 ended with a belief that China is a location that is difficult to replicate — as long as things don't change too drastically.

Agilian Technology, which makes products mostly for Western brands, saw its US orders — accounting for more than half its revenue — frozen for months and clients demanded it set up production outside China.

Tariffs brought chaos to many Chinese companies but Beijing's retaliation — export controls on minerals and metals that US firms need and are difficult to source — reduced the levies.

This allowed Agilian, a US$30-million-a-year business, to recover though it has pursued offshoring.

A recovery in China's manufacturing sector might surprise Trump following the anniversary of his "Liberation Day" tariff rollout, given that he campaigned on using levies to reindustrialise the American economy and project US power.

"The data confirms that Trump's tariffs indeed haven't derailed the momentum that we've seen in China's manufacturing sector," said Nick Marro, principal economist for Asia and lead for global trade at the Economist Intelligence Unit.

China's trade surplus for the first two months of 2026 rose to US$213.6 billion, official data showed, from US$169.21 billion a year earlier.

Gaussorgues wondered whether Trump would make a breakthrough when he visits China next month. Economists and industry executives expect Trump's visit to extend a detente between the two rivals.

According to Denis Depoux, the general manager of consultancy Roland Berger, He Yadong, a spokesperson for China's Ministry of Commerce, said: "China has shown the rare earths (are) a leverage of mass destruction.

"It's a nuclear weapon of trade."

Today, Agilian executives view Trump's tariff policies as guideposts for how to deal with future flare-ups.

In 2024, as Trump was rising in election polls, Agilian's clients wanted to get ahead of tariffs and asked the firm to ship products to North American warehouses.

Other US importers had similar ideas and storage prices went "crazy", said Renaud Anjoran, the firm's vice-president.

Shortly after Trump was re-elected, post-midnight calls from "panicked" clients became frequent. One customer with family in Penang urged Agilian to set up a production base there.

Agilian had set up an entity in India, but most clients pushed back on operating there, worried about slow production and Customs delays.

After Trump was inaugurated, two tariff hikes on China totalling 20 per cent concerned clients, but they stuck around. Then on April 2, tariffs on Chinese exports rose another 34 percentage points. For Agilian customers, "this was a disaster" and many cancelled orders.

China retaliated. Escalations pushed the levies above 100 per cent on both sides before the end of the month. "Things were frozen," said Anjoran.

The company decided to go with Penang and found a factory to partner with. It was preferred because it was removed from the South China Sea, where military conflicts can't be ruled out.

Agilian also scouted industrial rental space in Dharwad, India, and even looked at moving production to the US.

By mid-2025, Agilian's India team found a 4,000-square-metre industrial building and was discussing which products could be made there.

But then a May Washington-Beijing deal removed most of the tariffs imposed on China.

In August, Trump hiked tariffs on India by 50 per cent to force it to stop buying Russian oil.

But Anjoran pressed ahead: "We want to be a multi-country manufacturer. Focus on the long arc of time." Pre-production runs in Penang also started in the middle of the year.

Through the summer, China's export controls exposed US dependence on materials processed almost exclusively in China, squeezing autos, defence and other industries.

An October meeting between Trump and Chinese President Xi Jinping brought tariffs down by 10 percentage points. By then, Agilian's clients had stopped asking about levies and offshoring.

Agilian will keep developing facilities in India and Malaysia "as an insurance policy," Gaussorgues said.

He hopes to grow revenue 30 per cent in the next three years, though he fears Trump could get in the way again.

"I started in January saying, okay, this might be a good year and then the Iran war started," he said.

Source: www.thestar.com.my