STEVE INSKEEP, HOST:
We are 13 months out from Liberation Day, when Trump imposed tariffs on China that quickly escalated over 145%. So much has happened since then. Eventually, the United States Supreme Court ruled his tariffs were illegal, but very little was resolved in a long-term relationship with two countries that once seemed like partners, then like rivals and that seemed to drift apart year by year. Manufacturers in both countries face uncertainty, and my colleague Jennifer Pak has been hearing their stories. She's following a manufacturer in the U.S. and one in China.
JENNIFER PAK, BYLINE: At a factory in the shoemaking hub Dongguan city, nearly 400 workers cut material...
(SOUNDBITE OF CUTTING MATERIAL)
PAK: ...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 Gau, whose company named SHOEBOT owns this factory. He points to workers brushing glue on shoe soles.
JAMES GAU: (Speaking Mandarin).
PAK: "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.
(SOUNDBITE OF MACHINERY RUNNING)
PAK: America had shoemaking skills, he says, but it lost out to countries where manufacturing costs less, including China.
UNIDENTIFIED PERSON #1: (Speaking Mandarin).
UNIDENTIFIED PERSON #2: (Speaking Mandarin).
PAK: It 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...
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT DONALD TRUMP: Taken advantage of us, ripped us off and left us for dead, frankly.
PAK: China pushed back. Trump retaliated.
GAU: (Speaking Mandarin).
PAK: "The tariffs meant it didn't make sense for us to make shoes in China for the U.S. market," says Gau. "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.
(SOUNDBITE OF MACHINERY RUNNING)
PAK: Across the Pacific, tariffs are also driving up costs for American manufacturers that buy components from China. For example, this Texas-based factory.
OK. Just for my recording level...
ZAHID AYUB: Yeah.
PAK: And you can drink your coffee 'cause it's not live or whatever.
AYUB: Sure, sure.
PAK: I came to meet the owner, Zahid Ayub. He's the founder of Isotherm. It designs equipment for commercial fisheries, oil and gas - basically anything that requires cooling. For 25+ years, he's been manufacturing here in Arlington, Texas.
AYUB: This is all Chinese materials.
PAK: Titanium, mostly?
AYUB: Titanium, yeah.
PAK: 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.
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PAK: Since 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 Ipsos survey. China would welcome this. Ahead of Trump's visit, the Chinese foreign ministry released this video...
(SOUNDBITE OF ARCHIVED RECORDING)
UNIDENTIFIED NARRATOR: (Speaking Mandarin).
PAK: ...Highlighting the benefits of U.S.-China cooperation.
(SOUNDBITE OF ARCHIVED RECORDING)
UNIDENTIFIED NARRATOR: (Speaking Mandarin).
PAK: "Today, China-U.S. trade matches the annual GDP of a midsize country," it says. Thousands of American companies invest in China. Eighty percent 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.
(SOUNDBITE OF WELDING)
PAK: For Texas manufacturer Ayub, he's got modest hopes for any tariff relief this week.
AYUB: Well, I'm just hoping that it will not go up. Hopefully, it will come down.
PAK: And he's still looking to diversify his manufacturing outside of the U.S., including to China.
AYUB: You always keep all your options open, so we are still looking into that.
(SOUNDBITE OF MACHINERY RUNNING)
PAK: As for Gau in Dongguan...
GAU: (Speaking Mandarin).
PAK: He says he's been trying to enter more non-U.S. markets since just before Trump returned to the White House last year.
(SOUNDBITE OF MACHINERY BUZZING)
PAK: In a world that's become more unpredictable, Gau says he just wants to stay agile.
(SOUNDBITE OF MACHINERY BUZZING)
PAK: Jennifer Pak, NPR News in Dongguan city, China. Transcript provided by NPR, Copyright NPR.
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