FALL RIVER — On a factory floor in this city’s downtown, workers at Merrow Manufacturing are stitching sweaters, beanies, and blankets destined for distribution across the United States and Europe. The plan was to expand sales to China, but now that’s off the table.
Same complication on another floor in the building where Merrow makes sewing machines, some of which are exported to China and many other countries. The chief executive of the nearly two-century-old manufacturer, Charlie Merrow, said half its business is exports, with about 10 percent going to China, but that market is now paralyzed after Beijing slapped retaliatory tariffs on American imports.
“All open purchase orders are frozen,” Merrow said. “The machines that we build already are expensive and we can’t export them. Period.”
He said Merrow machines average about $4,700 retail, so tariffs from China would substantially increase their costs.
“We are not reducing our prices to offset tariff increases,” he said.
His company is among those Massachusetts manufacturers caught in the middle of a tit-for-tat tariff battle between the world’s two largest economies.
While China is best known as the largest supplier of products imported into the US, it is also an important two-way goods highway for US manufacturers. It is the state’s largest foreign-goods market, with Massachusetts sending nearly $4 billion worth of products in 2024, 11 percent of all goods exported from the state, according to the office of the US Trade Representative.
President Trump has suggested his administration might reduce tariffs eventually but it’s unclear what the final rates will be, when they might come into effect, and how China might respond.
The import levies China placed on US goods after Trump’s tariffs means any company exporting US-origin products to China will face significant obstacles.
“It means a substantial cost of doing business in China and a substantial barrier to entry into the Chinese market,” said Matthew Bock, a partner at Bock Trade Law.
Merrow said the potential loss of the Chinese market may not lead to job losses for his business for the moment. The decline in the value of the US dollar may help compensate, since it makes US goods sold overseas cheaper. But any additional costs along the way from tariffs only make it tougher to export for an industry with low profit margins.
“We don’t think that the suppliers and the factories have made their final decisions about what they’re going to do . . . our concern is that once it firms up, that we might see a significant change in the demand,” he said. “The tariffs on the Chinese market are effectively an embargo on American goods.”
Last year, industrial machinery products topped the list of goods exports to China from Massachusetts at $1.6 billion, data from the US-China Business Council show.
Analysts say high costs of selling products in China has Massachusetts companies facing the prospect of losing that market to competitors from other countries.
“It could go to a local competitor. It could go to a Japanese one, a German one, one from Australia or Thailand, you name it,” said Branner Stewart, senior research manager at the UMass Donahue Institute.
A fall in exports could hurt jobs in the state, he added.
“Companies will try to forestall any sort of layoffs but, you know, if the demand is not there or the demand is diminished then labor savings . . . may be necessary for some companies,” he said.
Some businesses may try to find alternative ways to maintain access to China.
“Depending on the size of the company, that may include pushing production . . . to other locations outside the United States where they could then still tap into the Chinese market,” Stewart said.
Merrow, the Fall River-based CEO, said his company was considering establishing a presence in Europe in 2025, which is also embroiled in a trade war with the US, to mitigate against the impact of tariffs on his business.
“We are thinking about opening up an assembly facility in Europe to support the European market and, potentially if the tariffs firm up, using a European assembly and parts distribution facility to support the Chinese market and the European markets,” he said.
Kristen Morneau, a trade compliance director with the freight forwarding company OceanAir, said the challenge for some companies is they are getting hit by both sides in the trade war.
“There may be a component that’s imported and then built into a customized device, which is then shipped back out. So it is actually seeing the China tariff at time of importation on a component,” she said. “Then [the product] could be facing retaliation when it gets back to China as a finished article.”
Morneau suggested some companies are hoping for a reprieve for certain sectors in the coming weeks such as what Trump provided to the US auto industry when he limited the number of tariffs that automobiles and auto parts will face coming into the country.
“What we’re going to see for our export customers going to China is going to be a moment of pause for their customers in China to see how this plays out over the next couple of weeks,” Morneau said.
For now, it could be too early to see the full effects of the tariffs on US exports to China.
“The effects will be real and will likely be seen in coming months, but it is currently too soon to quantify the actual impacts of Chinese tariffs on US exports,” said Stewart from the UMass Donahue Institute.
Merrow said American exports are important for the South Coast and US manufacturing.
“There is sometimes a misperception that US manufacturing is driven by US demand for goods, and in fact we are competitive building machinery and equipment and exporting it into markets around the world,” he said.
“Punitive, reciprocal, tariffs make it harder to export product.”
Omar Mohammed can be reached at omar.mohammed@globe.com. Follow him on Twitter (X) @shurufu.