Some Companies Return Manufacturing to China as Tariff-Driven Shift Proves Hard to Replicate

MacroIndustry
โดย Reuters·CNUS·Read original
Summary · why it matters

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.

Impact on stocks 2

Consumer Staples▲ · 1 stocks
Target Corporation
TGT
▲ PositiveSupplyrelevance

Target moved some orders back to Chinese suppliers after supply-chain disruptions and production constraints abroad, easing its sourcing problems.

Others▼ · 1 stocks
SHEIN Global Holdings Limited
0625
▼ NegativeSupplyrelevance

Shein is scaling back some Vietnam operations, reflecting difficulty replicating China's supply ecosystem abroad.

Off-coverage companies 1

Dawang MetalsPrivate▲ Positive
Demandrelevance

A major U.S. agricultural machinery customer returned with new orders to Dawang after problems in India, and Dawang abandoned its offshore move.

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