The lasting effects of Trump’s tariff war with China

0:00Support for this podcast and the following message come from Rivian, makers of the all-electric three-row R1S SUV and the always capable R1T pickup, designed with the planet and future generations in mind. Learn more or schedule a demo drive at rivian.com. Today on State of the World, the lasting effects of Trump's tariff war with China.

0:25You're listening to State of the World from NPR. We bring you the day's most Vital international stories up close where they're happening. It's Wednesday, May 13th. I'm Greg Dixon. Over a year ago, President Trump's Liberation Day tariffs hit China hard. Then came a back-and-forth escalation that at one point pushed rates as high as 145%. A truce was eventually declared, and the U.S. Supreme Court has now ruled that those tariffs were illegal. President Trump is in China this week, and talks about trade are on the agenda. Ahead of this visit, NPR's Jennifer Pack has been looking at the uncertainty the tariff war brought for manufacturers.

1:08She brings us this story of the long-term effects for a factory in the U.S. and one in China. At a factory in the shoemaking hub Dongguan City, nearly 400 workers cut material, punch holes and sew casual and athletic shoes mainly for Western brands. They work with a lot of machines. But the most critical tasks are still done by hand, says James Gao, whose company named ShoeBot owns this factory. He points to workers brushing glue on shoe soles. If you don't apply enough glue, he says, the bottom of the shoe will come off. Apply too much, the glue oozes out, and the shoe is defective. This is a very technical skill, something he says he can't find in the U.S.

1:58America had shoemaking skills, he says, but it lost out to countries where manufacturing costs less, including China. This is the shoe on the top.

2:12It doesn't sound like it, But this is the front line of the U.S.-China trade war. President Trump, in his first term, said China is eating America's lunch. He repeated the sentiment a year ago, saying that China and other trade partners have taken advantage of us, ripped us off, and left us for dead, frankly. China pushed back. Trump retaliated.

2:39The tariffs meant it didn't make sense for us to make shoes in China for the U.S. market, says Gao. We quickly went into a joint venture to manufacture in Vietnam, where the U.S. tariffs were not as high. So Trump's tariffs have pushed some of the supply chain out of China, but not back to the U.S.

3:01Across the Pacific, tariffs are also driving up costs for American manufacturers that buy components from China. For example, this Texas-based factory. Just for my recording level, and you can drink your coffee because it's not right. I came to meet the owner, Sahid Ayyub. He's the founder of Isotherm. It designs equipment for commercial fisheries, oil and gas, basically anything that requires cooling. For 25 plus years, he's been manufacturing here in Arlington, Texas. This is all Chinese material. Titanium mostly? Titanium, yeah. Raw materials, though, are mostly imported from China. So when the tariffs went up last spring, Ayub started thinking about moving part of his business out of the U.S.

3:49Since then, the U.S. and China have struck a trade truce. And a majority of Americans say they're against increasing tariffs on Chinese imports, according to a new NPR, Chicago Council and Ipso survey. China would welcome this. Ahead of Trump's visit, the Chinese foreign ministry released this video. highlighting the benefits of U.S.-China cooperation.

4:17Today, China-U.S. trade matches the annual GDP of a mid-sized country, it says. Thousands of American companies invest in China. 80 % of Apple's core suppliers have plants in China. It's an upbeat message. But for businesses on the front line of U.S.-China trade, their experience since Trump's first term has not been so positive.

4:42For Texas manufacturer Ayub, he's got modest hopes for any tariff relief this week. I'm just hoping that it will not go up. Hopefully it will come down. And he's still looking to diversify his manufacturing outside of the U.S., including to China. You always keep all your options open. So we are still looking into that. As for Gao in Dongguan,

5:13he says he's been trying to enter more non-U.S. markets since just before Trump returned to the White House last year. In a world that's become more unpredictable, Gao says he just wants to stay agile. Jennifer Pack, NPR News in Dongguan City, China.

5:37That's the State of the World from NPR. Thanks for listening.

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