The Anxious C.E.O.'s Guide to Surviving a Global Trade War

New York Times

09-05-2025

Randy Carr watched the news on his laptop the way you look at a doctor about to administer a shot — nervously and braced for pain. It was April 2, and President Trump was in the Rose Garden about to unveil new tariffs.
An upbeat, slightly jacked 52-year-old, Mr. Carr is the chief executive of World Emblem, a privately held company based in Fort Lauderdale, Fla., that produces about 150 million embroidered patches a year, most of which end up on shirts and hats. He radiates so much energy that even sitting down he appears to be set on vibrate. He's intense about everything, including his diet, which he described one recent afternoon, karate chopping a tabletop for emphasis.
Two hundred grams of protein a day (bam!), lots of vegetables (bam!), low carbs (bam!), no sugar (bam!). He gets up at 5 a.m. to lift weights every morning and runs five miles every afternoon.
'It's about being the best I can be every day, for everybody here,' he said. 'I wouldn't want to compete with this company.'
His father started World Emblem in 1990, with two machines in a warehouse in a suburb of Miami. The company's fortunes were improving by the time it opened a factory in Mexico, in 2005. Today that operation is the size of eight football fields and employs more than 800 people. In a typical week, it produces about 2.5 million emblems.
There is now $40 million worth of equipment in the plant, a major investment that on April 2 looked as if it was about to become a disastrous liability. Mr. Trump had already imposed, and paused, 25 percent tariffs on Mexico. Mr. Carr feared that if those tariffs were reimposed he'd have to oversee a kind of emergency evacuation. He'd already done the math. It would take about 1,000 trucks, and perhaps two years, to transport many tons of embroidering machines to World Emblem's smaller factories in Georgia and Texas.
More than a dozen members of his sales team were gathered in Fort Lauderdale, all of them trying to ignore the 'Liberation Day' news. Seated nearby, Mr. Carr muted his computer and did his best to keep poker face. First, the crawl on CNBC said that China would get hit with a market-rattling 34 percent tariff, on top of the 20 percent already in place. Then, one by one, other countries were walloped. Eventually, Mr. Trump said that Mexico and Canada would face a 10 percent tariff.
Ten percent, Mr. Carr thought. We can live with that.
Soon after, he read something else. Companies covered by the US-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement in 2020, were exempt. World Emblem was one of them.
Not a 10 percent tariff. No tariff.
It took a moment to put it all together. The prices of competitors in China would soar. His would stay the same. Euphoria set in.
'I said, 'Guys, we just hit the lottery,'' he recalled recently. 'Within about 20 minutes, I'm on the phone with my director of marketing. I'm saying, 'All right, 10X our spending. You have 24 hours to come up with a campaign to leverage this opportunity.''
World Emblem was soon running ads on LinkedIn and Google.
'Affected by Tariffs? We've got you covered!' read one.
'Why World Emblem? No tariffs = no price increase,' read another.
The tone of the ads were so triumphalist, amid so much gloom, that they caused a bit of blowback.
'Read the room, jackass,' wrote one detractor.
Within days, Mr. Carr had reconsidered the notion that he'd 'dodged a bullet,' as he put it. World Emblem owns a subsidiary in California that sources many of its products from China and Southeast Asia. Come to think of it, some of World Emblem's raw materials, like dye, come from China, too. Those prices were going up. And if tariffs helped tip the U.S. economy into recession, the company would suffer.
The sense he'd won much of anything, let alone the lottery, slowly vanished. One afternoon in mid-April, he swiveled a little frenetically in an office chair on the second floor of World Emblem's factory in Aguascalientes, Mexico. He sized up the changing economic landscape and didn't like what he saw. The company, he realized, was about to learn a lesson as pointed as any parable. When tariffs hit virtually the entire world, there is no safe harbor.
'This is not just about my customers,' he said. 'It's also about their customers, and their customers' customers. And consumers. Because demand is about to go down.'
Tiptoeing into Mexico
It's hard to remember now, but World Emblem's move to Mexico was exactly what the U.S. government wanted. One objective of the North American Free Trade Agreement, which went into effect in 1994, was to help Mexico build its middle class, which would ease the flow of migrants north.
A few years before NAFTA took hold, Jerold Carr, Randy's father, started Emblem Service Center, as it was initially called, near Miami. It was a do-over. The elder Carr's first emblem company had failed in 1988.
It was a dark period for Randy Carr, then a teenager. His parents had just divorced, and his father, still smarting from the collapse of his business, would fly into rages when Randy asked about it.
'If you're defined by your work and your work goes south, what are you?' said Randy Carr. 'It was rough for him. He was angry.'
He was also nearly broke. He called Randy and his older brother, Jamie, and said he could no longer afford their college tuition. Both dropped out and started working for their father.
To economize, all three Carrs shared a one-bedroom apartment. The company didn't make money for five years, because profits were poured back into the business. Jerold kept saying he just wanted to achieve long-term viability before he died. In 2000, Jerold was killed by an aneurysm. Randy, then 26, started running the company which by then was doing about $4 million a year in sales with 50 employees. Jamie became the sales director.
The Mexico idea came from a lawyer he met through a friend. Wages would cost one third as much as domestic wages, the lawyer said. During a multicity road trip in the country in 2005, Mr. Carr was initially unimpressed. At one point, he and the lawyer were briefly pulled over by federal police, who were carrying assault rifles. Nothing happened, but it reinforced the impression he'd gleaned from popular culture, and concerned friends, that Mexico was dangerous.
The upsides, though, were too enticing and eventually, he tiptoed in. He started with a 25,000-square-foot facility and signed personal guarantees to get a loan of $1 million.
'The government was incredibly supportive,' he recalled. 'It reimbursed our training costs for all employees for the first six months. The governor came to our ribbon-cutting. In the States, I can't get my phone calls returned.'
Today, World Emblem does just north of $100 million a year. Growth has been gradual, never in a straight, upward line.
'I still have paranoia that we're going to go broke,' he said. 'Like, every day.'
Bright, Clean, Humming
Aguascalientes is in the dead center of Mexico, and today, it's a city of about 1.4 million. Nissan first moved there in 1982 and has since invested billions of dollars. Dozens of companies have followed.
The outer edges of the city could pass for a thriving, dusty exurb in the American southwest. There's a new mall, filled with chains like Sephora and Boss, a multiplex cinema, high-end restaurants — one especially sleek steakhouse offers a 'basil beef steak tower' — a Walmart, Starbucks galore, and a Marriott, which typically has a lobby filled with Japanese executives.
The factory is bright, clean and hums at a decibel level loud enough to require earplugs. Workers, most of them women, operate massive made-in-Japan machines that are essentially looms attached to computers, which can sew dozens of patches in minutes. Walk around at any time of day or night — the first shift starts at 7 a.m., the third ends at 1 a.m. — and you'll see emblems for corporations, sports teams, colleges, high schools and random designs, like a cartoonish, three-dimensional cat, bug-eyed and hurtling through the air.
A few years ago, Mr. Carr told an underling to hire new employees devoted to nonfungible tokens, a.k.a. NFTs, works of art that double as unique digital assets. There was an NFT craze at the time. Maybe, Mr. Carr thought, some customers would want to monetize their emblems, crypto-style.
'For two weeks, he was very upset that I hadn't hired an entire NFT team,' said Carolina Deves Rodriguez, the head of marketing. 'Then NFTs started to die out and he was like, 'I'm glad you never did that NFT thing.''
Mr. Carr has encountered few hitches in Mexico. His unionized work force is mostly stellar and friendly. The pace of production on the floor is a little slower than he'd like, he said, a cultural difference that he's making peace with, gradually.
But the economic benefits of the country are not what they used to be. Demand for labor in Mexico rose after Covid as more U.S. companies decided to move manufacturing out of Asia and closer to home. Prices for everything from fuel to buses have been rising in Aguascalientes. The union recently asked for a 15 percent raise. ('That's, like, ridiculous,' Mr. Carr said.) Last year, he looked at those rising overhead costs and started scouting other countries where he could open a factory.
Chaos Ensues
On Feb. 1, when President Trump announced 25 percent tariffs on goods from Canada and Mexico, a move out of Mexico suddenly seemed urgent. In Mr. Carr's typical turbocharged style, he wanted to fly to the Dominican Republic, which he'd decided was the ideal location, the next day. After touring a handful of sites, World Emblem signed a letter of intent on a vacant lot in an industrial park.
He also called a bunch of his biggest customers, all of whom are wholesalers of shirts and hats, most of them based in the United States. He told them that he would eat 50 percent of the tariffs, but pass along the rest to them. Some were understanding, many were livid. They were already reeling from tariffs imposed on China and other countries that produce their garments.
'I've got to tell you, there are still some relationships that have yet to recover,' he told me in mid-April, after the Mexico tariffs had been lifted. 'Irreparable damage.'
Mr. Carr is also expanding his factories in Georgia and Texas, where he now employs a total of about 242 workers. Until relief from tariffs was announced on April 2, adding square footage to U.S. facilities seemed like the only tariff-free path to growth, and it was consonant with Mr. Trump's ambition to expand the U.S. manufacturing base.
But even if Mr. Carr staffs up domestically, the job pays between $15 and $20 an hour, which has not been enough to attract native-born Americans.
'Most of our employees in the U.S. are foreign born. South and Central America from Venezuela, Mexico, Cuba,' said Mr. Carr. 'Less than 10 percent were born in the United States.'
Mr. Carr has no idea what hourly wage would lure in U.S.-born Americans. He just knows that what he offers appeals to very few of them, and that if he paid more, he could not compete.
Now there's a new problem. Some of the immigrants Mr. Carr employs have been spooked by the Trump administration's hostility to immigrants. Five Venezuelans in the Georgia and Texas plants have quit in recent weeks. Maybe he'll have to raise wages.
Making emblems, even with so much automation, is difficult, repetitive and tiring. In Aguascalientes, Carmen Esparza Noriega, 39, was securing a piece of red polyester fabric on one of the huge embroidering machines on the factory floor and took a brief break to describe her day.
Her shift starts at 7 a.m. and ends nine-and-a-half hours later, at 4:30 p.m. She gets a 15-minute break in the morning, and 30 minutes for lunch. She rides a bus to work every day, paid for by the company. Lunch is subsidized.
On the verge of her 19th year at the company, she earns $162 a week.
That's a sum that goes further in Mexico than in the United States, but still, she said through an interpreter, 'It's not enough.' Her shoulders hurt. So does one of her knees, a consequence of standing most of the day. There was no joy in her eyes when she said that her daughter recently joined the World Emblem payroll.
'It's Chaos'
I first met Mr. Carr on April 1, the day before the tariff reprieve that he didn't know was coming. He sat at a restaurant in Fort Lauderdale, gnawing through a tuna wrap and describing the anxiety he'd endured in the previous two months.
For three days, World Emblem had to pay tariffs on what it imported from its own factory in Mexico. Total cost: $100,000. Because of an administrative mistake by the company's customs broker, another $80,000 was sent to U.S. Customs in error.
'I called our broker and he said, 'You're not the only person dealing with this. It's chaos.' I said, 'I don't care about anybody else. I care about me right now,'' Mr. Carr recalled. 'So now I have to go to customs to try to get it back, which will take six months.'
The tariff threat in Mexico has passed, for the time being. He has other worries. He's long had a hunch that his father's first company flopped because it didn't innovate. Starting last year, the company was spending $150,000 a month on A.I. to help streamline orders. In January, that outlay was suspended. So was hiring. He's since restarted both, but, as he put it, 'Every day, I'm wondering if that's smart or not.'
Not long ago, his 23-year-old son joined the company. Like this father, Mr. Carr hopes to hand off a thriving enterprise. The Trump administration doesn't grasp how buffeted his and thousands of other companies are by tariffs imposed on everyone else, Mr. Carr said. Or how much time it takes for any corporation to change direction.
He describes the trade policy decisions of recent months as a 'nightmare.' What he won't do is criticize the author of that policy, or discuss whether he supports the president. Given how fraught politics have become, caution might be wise. But it's more than that.
'I'm a capitalist,' he said. 'We're given the rules of the game, and have to play by those rules. Whether I like them or not, is not really relevant. We've got to survive.'