In a world rife with chaos, Jacob Rothman believed he had found a sanctuary.
At 52, Mr. Rothman, originally from California, has dedicated over twenty years to managing factories in China that produce grilling accessories and other kitchenware for Walmart and retailers worldwide. He was quick to understand the mounting strains affecting the ties between his homeland and his business operations abroad.
During his first term, President Trump enacted tariffs on imports from China, a move that President Joseph R. Biden Jr. continued. The pandemic highlighted the vulnerabilities of the United States’ dependency on Chinese factories for a range of products, including ventilator components and essential medications.
Mr. Rothman and his company, Velong Enterprises, correctly foresaw the market’s need for alternatives to Chinese manufacturing. He established a joint venture in Vietnam and two more in India, and set up a wholly owned factory in Cambodia. He was confident that he could relocate production to mitigate risks associated with tariffs, conflicts, and natural disasters.
“I thought I was really ahead of the curve,” Mr. Rothman reflected this week, grappling with an unexpected challenge—a massive wave of tariffs affecting numerous countries simultaneously. “It’s apocalyptic,” he lamented. “People are at a loss for what to do next.”
Even with the White House recently pausing most tariffs except for those on China, Mr. Rothman remained unsettled. “What does ‘safe’ really mean anymore?” he questioned. “With a chaos-driven foreign policy, even Southeast Asia may no longer be secure.”
He anticipated that tariffs might eventually be levied against the region, as the Trump administration previously viewed Southeast Asia as a mere extension of Chinese trade interests.
The lasting effects of Mr. Trump’s intensified trade conflict resulted in the effective elimination of secure havens. In recent years, as global supply chains faced various crises—from tariffs to pandemic-related disruptions and shipping impediments in the Panama and Suez Canals—multinational corporations supplying goods to the U.S. have attempted to lessen their reliance on a single location by diversifying their production sites.
Apple relocated the production of some iPads and AirPods to Vietnam and increased iPhone manufacturing in India. Walmart shifted its orders from China to India and Mexico. Major brands like Nike and Samsung moved their production from Chinese facilities to other nations to sidestep American tariffs.
The sweeping measures announced by the Trump administration this week appeared to undermine that strategic approach. Duties on imports from China could soar to 125 percent, while those from Vietnam could rise to 46 percent, and Cambodian products might face tariffs of 49 percent. India is subject to a 27 percent duty.
Currently, the suspension of several tariffs has left China particularly vulnerable. However, importers remain aware that tariffs on other nations—especially in Southeast Asia—could be reinstated. This situation leads to confusion and delays, signaling potential increases in consumer prices.
“Supply chains require long-term planning, which is nearly impossible given the current climate,” said Ryan Petersen, CEO of Flexport, a global logistics firm based in San Francisco. “Many companies feel paralyzed and yearn for predictability.”
This reflects Mr. Rothman’s plight and the ongoing production of kitchen items at his factories. Once a college religion major who contemplated becoming a rabbi, he now serves as the “Spatula Rabbi,” answering calls from concerned clients across the globe. Just last month, he participated in a significant housewares trade show in Chicago, hosting a booth alongside his Indian partners, proudly displaying a banner that touted their geographical diversity: “Building the safest supply chain on the planet.”
“I believed we would be the answer,” Mr. Rothman expressed.
Then came Mr. Trump’s announcement of massive new tariffs on American imports.
Mr. Rothman felt particularly stunned by the tariffs on Cambodia, considering the country’s history with the U.S.—from the devastating carpet-bombing during the Vietnam War, which paved the way for the genocidal Khmer Rouge, to decades of isolation and poverty.
Following the news of the tariffs last week, a major retailer postponed a $5 million order, according to Mr. Rothman. Other clients may choose to hold finished goods in his warehouses, hoping for a reduction in tariffs. He expects that orders will decline by as much as 30 percent over the coming six months.
Mr. Rothman is struggling to reconcile the turmoil with the intended policy goals—to reduce American dependence on China while promoting domestic production.
He is contemplating offers to establish factories within the United States, in states like Mississippi, Utah, or Pennsylvania. Walmart offers a program to assist factories in setting up in its home state of Arkansas. Yet, launching a factory anywhere in the U.S. seems fraught with challenges.
How can he equip an American factory with the high tariffs currently imposed on machinery and equipment imports? How can he find sufficient labor amid widespread deportations of immigrants?
Building a factory is a costly and long-term endeavor. Should future American administrations alter policy, Mr. Rothman’s competitors could easily utilize lower-wage countries to manufacture their products, leaving him with a more expensive operation—a surefire path to failure.
“We elect presidents every four years,” Mr. Rothman noted. “It takes a minimum of that long to recuperate the costs of establishing a factory. If circumstances shift and manufacturing in the U.S. is no longer economically viable, what good would a factory in the U.S. be for me?”
