A woman in a blue cloth hairnet sews the finishing touches on a plush pink pig and an orange stuffed animal, then throws it into a huge pile at Maria Riao's factory in southern China. They will be boxed and shipped to the US, where many of Riao's clients are based.
The factory is quieter than it should be. The orders have been declining this year as Liao's customers hesitate in the face of a string of tariffs in which President Trump took products coming from China. Their duties led American small and medium-sized businesses to rely on factories in China to build what they designed, sold and sold.
The tariffs are echoing on the other side of the ocean at a two-storey factory that looks like Riao's Yarunri toy.
“We're helpless,” said Riao, 33, who runs the factory with his brother. “I don't know what the next quarter will look like.”
Liao is one of the millions of people in China who sew, cut, build and assemble toys, clothes, tools and cars that Americans use every day. The work they do allows businesses to sell things quickly and cheaply to US households.
With a global trade surplus of $1 trillion, China remains a global manufacturing powerhouse. But Riao's struggle shows that Trump's tariffs, including a 20% foundation for all products, are challenging the truth of China for years. The US could no longer be a major destination for products made by small businesses like Riao.
One customer selling toy dolls based on the book's characters has recently sought a price cut of 20%. She earns a 30% profit margin on the products she produces. This is a cushion that allows for fluctuations in material and labor costs. Such a sudden price cut would wipe out most of her profits and make it difficult to continue operating, Riao said.
Still, it wasn't easy for her to say no. Last year, the customer ordered 25,000 toy dolls. This is one of the biggest single orders Riao has received. Overall orders have fallen nearly 30% this year, she said.
For hardworking Chinese companies that have long linked prosperity to the demands of American customers, Trump's aim to cut off trade ties with China forces more urgent questions: What's next?
It's difficult for Riao to answer. First of all, American companies account for 30% of the export business. She also cherishes the difficult cultural benefits she has gained from her trade with the United States.
Working with us has changed her perspective on everything from business behaviour to how she sees her place in society.
Riao started the factory with his brothers in 2019 after working at another toy factory for five years to help find new customers. She said she was more reserved when interacting with her clients. But then she began working with American business owners, directly and open to everyone, leading up to their personal lives.
One client in particular has had a huge impact on her life, Riao said.
Erica Campbell's Phoenix-based The company, Be a Heart, has been Riao's client from the beginning. Campbell's orders on Jesus and Mary's dolls made a tenth of Liao's work.
Meanwhile, Riao and 36-year-old Campbell each gave birth to their first children. Their personal lives are intertwined with conversations about business collaboration and product design. Riao said it was the first time he'd ever known a woman who juggled her family duties and her own business. In their conversation, Riao said that Campbell would sometimes explain to her that she would find time in the middle of the night to draw the design for her next product.
Seeing women looking at work and home gave them confidence to continue working after their daughter was born, Riao said.
A few months ago, Liao sent a message to Campbell, telling her that the business is really slow and was overwhelmed by the worsening trade tensions between China and the US. She was trying to find a way to keep things floating. In response, Campbell shared her own challenges. “I'm on fire,” Campbell wrote back. One of her employees just left unexpectedly, and Campbell recently gave birth to her third child. “Motherhood is kicking my ass,” she said.
Then she had an idea. Liao was able to take over some of the jobs his employees had done, source materials and communicate with other factories in China. “She did very well,” Campbell said.
When Campbell finally placed his 2025 Christmas production order with Liao a few weeks ago, it was half of last year's order due to uncertainty over the tariffs and recession last year.
For now, Campbell plans to take up most of the tariffs and hand some of the costs to its clients. However, if the tariffs exceed 20%, she said she must tell Liao what to do next.
It's going to be a difficult conversation. Campbell said he wasn't comfortable asking his Chinese partner to cover the costs that Liao couldn't control.
“We often deal with the same small business stressors and we had to navigate that much,” Campbell said. “People want to create this gap, but we are the same and we were born in different countries.”
For Liao, if everyone raises costs to ease the tariff hit, it could lead to a situation where she doesn't like to stand up: “We may not be able to serve American customers.”
you Contributed research.
