NAVIGATING THE TARIFF WAR BETWEEN THE U.S. AND CHINA

How We’re Adapting, Expanding, and Leading Through Global Disruption

As someone deeply involved in global manufacturing, I’ve been in the thick of the U.S.–China tariff war. It’s impacted us directly, forcing quick decisions and long-term strategy shifts. Here’s how we’ve responded—and what other businesses can learn from it.

When the U.S. first raised tariffs on Chinese imports, we immediately knew our margins would take a hit. But rather than absorb the blow or wait it out, we took action. I flew to China and Hong Kong for an intense 48-hour trip, meeting face-to-face with our key factories. There’s no substitute for showing up in person when things get challenging.

I was clear with our partners: we either work together to share the burden, or we begin shifting production elsewhere. That wasn’t a threat—it was the reality. And many of them responded positively. Our long-standing relationships, paired with a firm but collaborative approach, opened doors to better pricing, revised timelines, and renewed commitment.

At the same time, we didn’t just push the problem upstream—we had honest conversations with our clients. Tariffs don’t hit just one link in the chain—they impact everyone. We were transparent, explained the situation clearly, and updated pricing where necessary. Some pushed back. Many appreciated the honesty. But trust remained intact.

Most importantly, we knew we couldn’t rely on one region forever. So, we began diversifying—establishing new assembly operations in other parts of the world, including the United States. This isn’t just about dodging tariffs. It’s about building a more agile, resilient supply chain that can support our clients globally with greater speed and flexibility.

What this experience has taught me is simple: global business rewards those who adapt fast, communicate clearly, and build strong, responsive partnerships. We’re still navigating challenges, but our business is stronger, leaner, and more diversified than it was before this started.

If you’re facing the same pressures, don’t sit still. Get on a plane. Have the tough talks. Rebuild your model for what’s next—not what used to work.

“If you’re facing similar challenges, don’t just passively take the hit. Get on a plane. Have the uncomfortable conversations. Show your suppliers and clients that you’re serious—and solutions will follow.”

— GEORGE STROUMBOULIS

DO TARIFFS WORK?

When Tariffs Can Work:

Leverage in Trade Negotiations:
They can be used as a bargaining chip to pressure countries into fairer trade terms or compliance with international standards.
Protecting Domestic Industries:
Tariffs can help shield emerging or strategic industries from being undercut by cheaper foreign imports (e.g., steel, solar, or semiconductors).
Encouraging Local Sourcing:
Higher import costs can push companies to shift manufacturing back home or to friendlier regions — a goal in many U.S. industrial policy plans.

When Tariffs Don’t Work (or Backfire):

Cost Passed to Consumers:
Companies usually pass tariff costs along, raising prices on everything from electronics to construction materials.
Retaliation and Trade Wars:
Countries often retaliate with their own tariffs, hurting exporters and escalating tension (as seen in the U.S.–China case).
Supply Chain Disruption:
For global companies (like yours), tariffs disrupt sourcing, force renegotiations, and strain factory relationships.
Limited Long-Term Gains:
Tariffs rarely rebuild industries on their own. Without broader investment in innovation and infrastructure, they’re just a short-term fix.

HOW SHOULD YOU HANDLE TARIFFS ON YOUR PRODUCTS?

Don’t React. Strategize.

When tariffs hit your products, it’s tempting to either absorb the cost or pass it straight to your customers. But neither approach builds long-term resilience. Here's how we’ve successfully navigated tariff pressure in a global business environment—and how you can too.

🔍 1. Know Your Numbers

Start by understanding exactly how tariffs impact your landed cost per product. Get clear on:

Duty rates by product category
Country of origin rules
Shipping, brokerage, and compliance fees

You can’t manage what you don’t measure.

🌍 2. Diversify Sourcing & Assembly

Relying on a single country makes you vulnerable. We began opening new assembly facilities in other parts of the world—including the U.S.— so we’re not tied to one region or tariff structure. Explore:

Alternative suppliers in Vietnam, Mexico, or Eastern Europe
Local or regional assembly to shift tariff classification
U.S.-based final assembly for “Made in USA” or reduced-duty entry

✈️ 3. Get Face-to-Face with Suppliers

Tariff increases are your opportunity to renegotiate. I flew to China and Hong Kong within 48 hours of the tariff hike to meet with factories directly. That in-person presence pushed for:

Cost-sharing agreements
Faster lead times
More favorable payment terms

Proactivity builds leverage.

💬 4. Communicate Transparently with Clients

Don’t blindside your customers with surprise pricing. Be honest. Explain how tariffs work, how they affect production, and what you’re doing to minimize the impact. Transparency builds trust—even if prices increase.

🔄 5. Redesign for Efficiency

Use tariffs as a trigger to review your product designs. Ask:

Can we simplify materials or assembly steps?
Can we reclassify under a lower duty code legally?
Can we bundle shipping more efficiently?

Pain often leads to better processes.

🔧 Bottom Line

Tariffs aren’t just an added cost—they’re a call to action. Evaluate. Adapt. Diversify. The businesses that succeed under tariff pressure aren’t the biggest—they’re the most agile.

CAN YOU EASILY SET UP MANUFACTURING IN THE USA OVER CHINA?

Here’s What You Need to Know from Someone Who’s Tried It.

As someone who’s built manufacturing partnerships across China, and more recently started establishing assembly operations in the U.S., I can tell you — shifting production stateside isn’t easy, but it’s becoming more necessary.

✅ What the U.S. Offers:

Faster lead times for domestic delivery
No tariffs on Chinese imports
Closer oversight and quality control
Marketing benefit of “Made in USA” or “Assembled in USA”
Access to funding/incentives in some states for reshoring

🚫 But Here’s the Reality Check:

Labor costs are significantly higher
Skilled labor shortages in specialized manufacturing sectors
Limited factory infrastructure compared to China
Fewer suppliers for raw materials and components
Longer ramp-up times to match China’s speed and volume

💡 What We Did Instead:

Rather than fully replicate China’s factory model, we focused on:

Assembly operations in the U.S. to add value and shift classification
Hybrid supply chains (components from Asia, assembly in the U.S./EU)
Strategic partnerships with American manufacturers where possible
Automation where practical to offset labor costs

👇 Final Thought:

You can’t replace China overnight. But you can reduce exposure and build resilience by using the U.S. as part of a diversified global strategy. Think hybrid. Think agile. Think long-term.