SHEIN Global Holdings Limited

A year after moving production and sourcing out of China to avoid higher U.S. tariffs, some companies are bringing manufacturing back, finding that replicating China's factory ecosystem abroad is harder than expected. Heather Kuang, vice president of family-owned metal casting company Dawang Metals in Dandong, said a major U.S. agricultural machinery customer that shifted some orders to India has since returned with new orders after running into problems there, and Dawang abandoned its own plan to move production offshore. U.S. retailer Target has moved some orders back to Chinese suppliers, citing supply-chain disruptions and production constraints, according to two people familiar with the matter, while Chinese fast-fashion retailer Shein is scaling back some operations in Vietnam. Hangzhou outdoor furniture exporter Jin Chaofeng said he shut a workshop in Ho Chi Minh City that he opened in 2024 and moved production back to China this year after struggling to find equipment and basic items such as screws and moulds. The reversal comes as China faced an effective U.S. tariff rate of about 20%, compared with 6.1% for Vietnam, 13.4% for Indonesia and 4.5% for Thailand, according to Economist Intelligence Unit estimates in July, though that advantage has narrowed as Washington extended tariffs to a wider range of countries. The shifts are unfolding ahead of an expected meeting between President Donald Trump and Chinese President Xi Jinping this month, which businesses will watch for clarity on a proposed mechanism to lower barriers on some non-sensitive goods.

France on Tuesday began implementing a fee system targeting extremely cheap fast fashion, in a bid to curb the surge in low-cost clothing sold on Chinese-origin online shopping sites such as SHEIN and Temu. The measure is part of the "fast fashion law" passed in June to address environmental damage caused by overproduction, imposing fees such as 0.25 euros (about $0.30) on boxer shorts and socks, and 12 euros (about $14) on coats. The fee is capped at 50% of the product's pre-tax sale price and is calculated based on the number of items offered by a brand, their prices, and ease of repair, with plans to raise it further from 2030. France is the first among European Union countries to impose penalties on retailers based on the number of products they offer online. According to SHEIN's prospectus, as of March 31 this year, it offered over 2 million items, with about 4,700 new apparel items added daily. According to authorities, European retailers such as Zara, owned by Inditex, and H&M, which offer fewer items on their sites, are not expected to be subject to the measure. SHEIN and Temu did not respond to requests for comment. China's Ministry of Commerce has expressed that the law is discriminatory and a trade barrier, potentially violating World Trade Organization principles.