How Trump's trade battle with China is crushing tiny US companies

[WORLD] In a single news cycle, the trajectory of a thriving founder-led business turned from scaling opportunity to survival planning. Dragon Glassware, a boutique US drinkware brand that found its niche by fusing aesthetic flair with Chinese manufacturing precision, had every reason to celebrate. Its founder, Matt Rollens, built a company from a $10,000 garage bet into a multimillion-dollar consumer goods story. Licensing deals with pop culture titans like Barbie and Wicked had just begun paying off.

But Trump’s re-election changed the equation overnight. With tariffs expected to return in force, and new scrutiny aimed at US companies sourcing from China, the brand’s cost base, production model, and growth roadmap suddenly look exposed. Dragon Glassware is not alone. What’s happening to it is a broader warning for founders navigating an increasingly hostile global trade environment—where agility is no longer optional, and the romanticism of “garage to global” success now comes with geopolitical footnotes.

The Backstory: How Global Sourcing Became a Double-Edged Sword

Dragon Glassware didn’t disrupt an industry—but it mastered the small-batch, high-margin model that defines a certain class of modern consumer startups. From 2017 onward, Rollens worked directly with Chinese manufacturers to create sleek, differentiated products that stood out in an Amazon-dominated retail landscape. These were not commodities; they were designed objects, often licensed, sometimes viral, and always made at a fraction of what US factories would charge.

This was classic founder pragmatism: go where the expertise is, scale without inventory bloat, reinvest in brand. As Inc. reported in 2022, “founders like Rollens built relationships with Chinese manufacturers not because they were cheap, but because they were fast, flexible, and good.” By 2023, China supplied over 80% of Dragon Glassware’s inventory. The Barbie collaboration, timed with the Greta Gerwig movie surge, doubled sales in Q3 alone.

But dependency cuts both ways. When Trump’s trade advisors floated a “universal tariff” on Chinese goods—potentially 60% across categories—brands like Dragon Glassware landed squarely in the blast radius. These aren’t multinationals with diversified supply chains. They’re founder-led firms optimized for speed, not political durability.

The Strategic Blind Spot: Founders Didn’t Price in Political Risk

Many founders are trained to think in product cycles, not election cycles. That’s the strategic gap now coming due.

Trump’s second act isn't just a rerun of tariff threats—it’s a broader reset on how American capitalism relates to Chinese production. His advisors are already drafting policies to restrict licensing deals with companies deemed reliant on “strategic adversaries.” That could rope in firms like Dragon Glassware, despite their small size.

The larger players saw it coming. Apple has moved some production to Vietnam and India. Shein, despite Chinese roots, is aggressively building a US logistics base and lobbying in Washington. But most microbrands either assumed the politics would calm—or that they were too small to be caught in the crosshairs.

It’s a mistake rooted in scale myopia. “Founders often forget that policy risk doesn’t scale with revenue,” notes trade analyst Emily Benson of CSIS. “You can be a $5 million business and still get hit with the full weight of macro policy shifts.”

And while e-commerce gives these brands reach, it also makes them legible. Data-driven customs enforcement, AI-enabled trade audits, and anti-subsidy probes now mean even boutique brands are traceable in ways that weren’t true a decade ago.

What Founders and Investors Should Be Watching

For operators in the consumer space, especially those leaning on single-country sourcing models, the action point is immediate: scenario planning must now include geopolitical decoupling.

Diversification isn’t just a margin hedge—it’s a survivability strategy. Southeast Asia may offer alternatives, but it won’t match China’s flexibility overnight. Meanwhile, Mexico’s nearshoring boom is already driving up prices and tightening capacity. That leaves brands with hard choices: raise prices, lower margins, or pivot production fast.

There’s also a talent implication. More founders will need to recruit operational leaders with international logistics and compliance chops—not just product marketers or growth hackers. For investors, that’s a lens worth applying to due diligence in the next funding round.

Licensing strategy, too, will need rethinking. Brands like Dragon Glassware, which depend on Hollywood or franchise IP, may find that licensors become more cautious about associating with firms exposed to geopolitical risk. As Barbie becomes a political football in trade debates, Rollens may discover that success makes you more visible—not just to customers, but to regulators and competitors.

Our Viewpoint

Dragon Glassware’s story is a lesson in scale, strategy, and geopolitics. What looked like a classic founder success narrative has become a case study in overconcentration risk. The company did everything right by 2017 playbook standards—but the rules have changed.

Small doesn’t mean safe anymore. Being nimble doesn’t guarantee resilience. And sourcing strategy, once a backend decision, is now front-page material.

The next generation of successful founder-led brands won’t just have good product-market fit—they’ll have political risk insurance built into their operating model. And those who still think tariffs are a headline issue, not a structural one, may find their growth stories disrupted before they scale.

Geopolitics is no longer just background noise—it’s product strategy. Founders who internalize that early will have an edge. Those who don’t may wake up, like Rollens, to find their margins—and their momentum—redefined by someone else’s election.