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A Shift in Manufacturing: American Businesses Move Production to Cambodia
For the first time in nearly two decades, Ryan Bursky’s business trip to Asia didn’t include a stop in China. His company, Lucidity Lights, had previously relied on Chinese manufacturing for its products—lamps and other lighting goods sold to major retailers like Walmart and Home Depot. However, the imposition of tariffs by President Trump during his first term forced Bursky to seek alternatives.
This led him to Cambodia. By the end of 2024, he had moved a quarter of his production from China to Cambodia, with that number rising to 70% within a few months. His goal was to shift all production out of China entirely. While home decor isn’t a sector at the center of geopolitical tensions, Bursky’s decision reflects a broader trend among American businesses reconfiguring supply chains in response to economic shifts.
Tariffs and Trade Dynamics
Lamps imported from China are currently subject to around 60% in duties, including new levies introduced by Trump. Meanwhile, Cambodian imports faced a temporary 49% tariff as part of Trump’s “Liberation Day” measures, but this has since dropped to 10% due to ongoing trade negotiations. Bursky is betting on the U.S. maintaining high tariffs on Chinese goods while keeping those on Cambodian products lower.
Sun Furong, owner of Litesun, one of Bursky’s suppliers, started building a factory in Cambodia two years ago. The area around her factory has transformed rapidly, with shops and eateries now lining the main road that was once largely empty. Sun estimates there are now about 10 factories in the area, all owned by Chinese manufacturers.
Reasons for the Shift
Tariffs aren’t the only reason companies are moving production to Cambodia. China’s aging population and focus on high-tech industries have made it less attractive for labor-intensive sectors. Cambodia offers young, low-cost labor and growth potential.
“There’s no future for us in this industry in China,” said Sun, who goes by the English name Sabrina. Moving production to Cambodia has helped Bursky secure new contracts with retailers seeking suppliers outside China. His company is on track to increase revenue by about 40% this year.
However, production costs in Cambodia are higher due to logistics challenges. Bursky and his manufacturers are working to establish a local supply chain to reduce these costs.
Personal Journeys and Business Challenges
Sun’s journey reflects China’s rise. She grew up in a poor family in rural Hubei province, eventually working in a Taiwanese-owned lighting factory in Dongguan. She taught herself English, got promoted, and opened her own factory in 2006.
Bursky, 42, has spent his entire career in the lighting industry. He helped out at his family’s showroom in Cleveland as a child and later rose through various roles before becoming CEO of Lucidity Lights in 2023.
Both Bursky and Sun faced similar challenges. Sun was encouraged to adopt a “China plus one” strategy, leading her to explore locations in Vietnam, Myanmar, Bangladesh, and Thailand. She ultimately chose Cambodia, where she began building her factory in June 2023.
Cambodia’s Growing Role
Cambodia, historically known for garment and footwear manufacturing, has seen a boom in its manufacturing industry since Trump’s first term. Exports to the U.S. have quadrupled since 2017, making up more than one-third of all Cambodian exports in 2024.
The U.S.-Cambodia trade deficit ballooned to over $12 billion in 2024, prompting concerns about Chinese goods being transshipped through Cambodia. In response, Cambodia implemented stricter rules of origin and certification procedures for certain exports to the U.S.
Challenges and Opportunities
Despite the challenges, Cambodia offers advantages. Its workforce is young, with roughly two-thirds under 35, and labor-force participation rates are high. Sun’s workers in Cambodia are on average around 25, compared to 50s in China.
The process of making lamps isn’t easily automated, requiring constant design changes similar to fast fashion. This makes it difficult to move production back to the U.S., where labor costs are much higher.
Bursky and Sun face their own challenges. Sun invested $10 million into her Cambodian factory and is still in the red. Bursky pressures her for price reductions, affecting her margins. Yet they rely on each other to sustain their businesses.
“We’re married, whether we like it or not,” Bursky said.
