In the engine room of China's economy Trump's tariffs are already beginning to bite

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If China is known as the world's factory, then the province of Guangdong is the engine room.

It is here, in the thousands of factories that dominate city suburbs where many of your consumer goods likely started their life, and it is here where Donald Trump's tariffs are hitting first.

China has arguably been the top target in the US president's trade war. Not only was it subject to a suite of measures during his first term, but this time round it is the only country that has had no carve-outs, no delays and tariffs are levied on 100% of Chinese goods.

A factory worker on the assembly line in an electrical appliances factory in Guangdong

Image: A factory worker on the assembly line in an electrical appliances factory in Guangdong

As of 4 March anything from China sold to the US faces a tax of at least 20%, and for many goods it's more than that.

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Johnny Pan

Image: Johnny Pan

Johnny Pan shows us the assembly line at his factory. This business has been in his family since the 90s and it makes appliances such as fans, air purifiers and air fryers.

Lines of workers are assembling the more complex components by hand.

A third of his products are currently sold to America. Tariffs have had an immediate impact; in just the last month they have seen a major drop off in orders amounting to millions of dollars.

"We have to seek out new markets to get away from the US," Mr Pan explains. "We should be diving more into product development. But now we have to figure out ways to survive."

He is actively looking to move some of his manufacturing abroad to avoid the tariffs.

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A factory that makes electrical appliances in Guangdong

Image: A factory that makes electrical appliances in Guangdong

But the alleyways of this area are scattered with smaller operations with fewer options.

Tiny workshops often specialise in just one element of a big process, small cogs in a supply chain they cannot control.

Through one garage door there are three sewing machines whirring; this tiny operation specialises in attaching buttons to garments.

A small factory in Guangzhou which specialises in adding buttons to garments

Image: A small factory which specialises in adding buttons to garments

The husband-and-wife team admit they're worried, incomes are lower, they explain, and it could have an impact on the thousands of contract workers who exist job to job.

Many here don't have an option to raise their prices. If the American consumer isn't willing to pay more, the only option is to seek new markets, but if new markets don't provide such willing buyers, jobs and livelihoods are at stake.

Indeed, this is China's key concern. A huge 20% of its GDP is exports, and a trade shock will have a major impact.

A small factory in Guangzhou which specialises in adding buttons to garments

And the economy is already struggling. Growth has slowed dramatically in recent years, there is very high youth unemployment and a lot of low-paid migrant workers.

The fact Beijing's response thus far has been relatively restrained signals an awareness it can ill afford a major escalation.

There is some solace in the fact China is a lot less exposed to the US than it once was - the trade war of 2016 means it already sends far fewer goods to America than it once did.

But this is still a system that fears instability above all else and can't be seen to lose face.

Many point to the broader context of two global superpowers that both crave dominance and are, in their own ways, trying to direct a shifting global order.

Tariffs may just be one issue in a bigger global standoff.

China might still be a mighty economy that can absorb some pain, but its leaders are unlikely to take things lying down.

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