This US-owned factory in China made toys for Walmart. Tariffs put it on life support

Nicholas P. Brown

Sun, May 11, 2025, 6:09 PM 7 min read

By Nicholas P. Brown

(Reuters) -The emails started pouring successful connected April 9, the time President Donald Trump’s 145% tariff connected Chinese imports took effect. Clients were canceling orders for toys from Huntar Company Inc.’s mill successful Guangdong Province, China.

But Huntar CEO Jason Cheung, 45, had already halted accumulation astatine the 600,000-square-foot installation successful Shaoguan. He saw the tariff for what it was: an existential menace to his company, which manufactures acquisition toys bound for the shelves of Walmart and Target, similar Learning Resources Inc's Numberblocks, which assistance thatch kids math.

“I needed to commencement redeeming wealth arsenic soon arsenic possible,” Cheung said. In the 4 weeks since, helium has chopped accumulation by 60% to 70%, laid disconnected a 3rd of the factory’s 400 Chinese workers, and reduced hours and wages to those inactive employed.

Now, he’s pursuing a frantic, long-shot effort to determination his cognition to Vietnam earlier the institution his dada founded 42 years agone runs retired of money.

He figures helium has astir a month.

Huntar’s plight typifies a situation facing countless factories successful China, wherever astir 80% of toys sold successful the U.S. are manufactured, according to commercialized radical The Toy Association. New orders person fallen sharply amid a brutal commercialized warfare with the United States that threatens to devastate the assemblage successful some countries.

Huntar is besides unsocial successful 1 cardinal way: based successful the U.S., it straddles some sides of the commercialized war.

On paper, Cheung is Trump’s bogeyman, the Chinese mill proprietor taking American jobs. But he’s besides the U.S. tiny concern proprietor tariffs were meant to protect. He's the American lad of a Chinese immigrant, moving a second-generation family-owned concern that employs 15 radical successful the U.S. - radical who would suffer their jobs if Huntar falters.

Trump has said tariffs volition incentivize companies to reshore manufacturing, or, astatine least, thrust it retired of China.

Huntar illustrates wherefore economists accidental that’s unlikely: a dearth of facilities and workers with artifact making expertise successful different countries; dense instrumentality that’s hard to determination and would outgo millions of dollars to replace; and, astir acutely, nary clip to lick those hurdles earlier coffers tally dry.

More likely, factories similar Cheung's volition simply unopen down, a imaginable that drove Beijing to the negotiating array with U.S. officials successful Geneva implicit the weekend, 3 sources acquainted with the Chinese government's reasoning told Reuters.

Realistically, China cannot regenerate U.S. marketplace request for merchandise categories similar toys, furniture, and textiles, which are already feeling the interaction of tariffs, 1 of the officials said. As commercialized talks began, Trump signaled helium was unfastened to cutting China tariffs to 80%.