America’s Dependence on Chinese Goods and the Consequences of Trump’s Tariff Policies

By Sedat Laçiner

America is the world’s largest consumer society. Consumption isn’t just a habit—it’s a way of life, even a defining element of American culture. While this consumerism has long been a characteristic of the U.S., it accelerated in the 1990s when Americans grew accustomed to cheap imports, especially from China. Thanks to a strong dollar and globalization, inexpensive goods began flooding into the U.S.

After joining the World Trade Organization in 2001, China began producing goods at an astonishing scale and low cost. By the 2000s, American consumers—like many around the world—became deeply reliant on Chinese products. Once associated with poor quality, Chinese goods gradually improved and came to dominate markets.

In 2018, Chinese products accounted for 21.6% of all U.S. imports—a record high. That means over one in five goods imported into the U.S. came from China. China’s dominance was especially strong in electronics, mobile phones, laptops, toys, machines, and furniture. In toy stores across America, over 80% of the toys are made in China, while less than 10% are American-made. Even holiday decorations like Christmas ornaments often come from China.

A report by Macquarie investment bank revealed staggering figures: 97% of baby carriages, 96% of umbrellas and artificial flowers, 95% of fireworks, 93% of children's coloring books, and 90% of combs imported to the U.S. are made in China.

Why is China so competitive? The reasons are simple: low labor costs, affordable energy and rent, and heavy government support. American companies couldn’t resist the cost advantage. Many relocated manufacturing to China or partnered with Chinese firms for contract production. As a result, U.S. supply chains became deeply intertwined with China.

In 2018, U.S. tariffs on Chinese goods averaged just over 3%. Today, they have skyrocketed to 145%.

COVID-19: A Wake-Up Call

The COVID-19 pandemic exposed America’s overreliance on foreign production, especially from China. From 2018 to 2025, the U.S. made deliberate efforts to reduce this dependency. The results were significant—China’s share of U.S. imports dropped from 21.6% to 13.4%, representing tens of billions of dollars in trade redirected elsewhere.

While the Biden administration implemented this strategy gradually, former President Trump accelerated it dramatically. Within months, he increased tariffs on Chinese goods tenfold or more. These sudden hikes left importers stunned.

Rick Woldenberg, CEO of Learning Resources—a company making educational toys in China—said he had planned for a worst-case tariff of 40%. Instead, it jumped to 145%. His annual customs duty surged from $2.3 million to $100 million. “It feels like we’re doomed,” he admitted, saying 60% of his Chinese-made products were no longer economically viable.

Woldenberg calls Trump’s suggestion to bring manufacturing back to the U.S. “a joke,” noting he’s tried but failed to find viable American partners. Learning Resources employs 450 people in the U.S., but like many firms, it relies heavily on Chinese components and infrastructure.

The Ripple Effect on Prices

Isaac Larian, founder of MGA Entertainment (makers of LOL and Bratz dolls), says Trump’s tariffs make business planning impossible. His company produces 65% of its toys in China, with the rest made in India, Cambodia, and Vietnam. He’s trying to reduce China’s share to 40%, but high tariffs also apply in those countries. (1)

Larian estimates that the $15 Bratz doll will cost $40 under new tariffs, while LOL dolls priced at $10 may double in price. Even U.S.-produced toys like Little Tikes cars—built in Ohio—depend on Chinese parts. Their price is expected to rise from $65 to $90. (2)

High prices could slash demand. MGA Entertainment warns it will sharply reduce orders to avoid unsold inventory. The effects could ripple through the global economy, as U.S. inflation and recession risks grow. Remember 1929? Or the 2008 crisis? Trouble in the U.S. economy quickly becomes a global crisis.

Trump’s Tariff Gamble

It’s true the U.S. has grown dangerously dependent on Chinese goods. But Trump’s aggressive and unpredictable measures have harmed American companies and consumers more than China. Businesses need stability to plan. Trump’s sudden 125% tariff announcement was revised to 145% within 24 hours, leaving the markets in chaos.

Now, many American firms are slashing orders from China. Some are canceling investments or trying to shift production elsewhere, but even the most optimistic scenarios suggest price increases of 25% to 100%. Moreover, there’s a lack of skilled labor in the U.S. to absorb manufacturing at this scale.

Chinese manufacturers are also at risk. If they lose their American customers and can’t find new markets quickly, they may go bankrupt. This could lead to product shortages in the U.S. and Europe—even if companies are willing to pay more, the goods may not exist.

Woldenberg explains: “We have 10,000 molds in China. You can’t just pack those up and move. There’s no idle U.S. factory waiting with skilled workers to take over.”

China’s greatest advantage is its massive, trained workforce. You can find thousands of engineers there for just one product line—something not easily replicated elsewhere.

The Outlook: Higher Costs and Uncertainty

Going forward, Americans may face higher prices and potential product shortages. Trump's tariffs have disrupted the U.S.-China supply chain by force, demanding “Made in America” with little preparation.

David French of the U.S. National Retail Federation warns, “Tariffs at this scale could have apocalyptic consequences.” (3)

Yale University’s Budget Lab estimates that Trump’s tariffs could lower U.S. GDP growth by 1.1 percentage points in 2025, nearly halving projected growth. The combination of recession and inflation—stagflation—could hit the economy hard. (4)

In short, Trump’s approach may backfire: fewer jobs, higher prices, factory closures, and economic slowdown. Add rising interest rates to the mix, and America faces a perfect storm.

By Prof. Dr. Sedat Laçiner
Current News and Essays

15 April 2025

NOTES
-----------------------

(1) "Trump’s China tariff shocks US importers. One CEO calls it ‘end of days", AP, 13 April 2025.

(2)  "Trump’s..."

(3)  "Trump’s..."

(4)  "Trump’s..."