China Opposes Shein’s Plans to Shift Production Overseas Amid US Tariffs
China has reportedly opposed Shein’s plans to move some production outside the country.
It’s part of an effort by the Chinese government to avoid manufacturers from leaving the country following new U.S. tariffs, Bloomberg News reported Tuesday (April 8).
A source familiar with the matter told Bloomberg that China’s Ministry of Commerce has communicated with Shein and other companies to dissuade them from diversifying supply chains by sourcing goods from other countries.
This source said the requests came before President Donald Trump announced his “reciprocal tariffs” on countries like China, leading companies to seek ways to avoid the levies. For Shein, this has meant doing things like stopping the reconnaissance tours it arranged for its major Chinese suppliers of factories in places like Vietnam, another source said.
Most Chinese products are facing a tariff of at least 54% upon entering the U.S., which has placed suppliers under pressure to take on most of the tariff burden or consider shifting production to somewhere else to lower costs, the report added.
The Bloomberg report noted that the tariffs are threatening China’s future as a major expert hub. Tariff exemptions on small parcels are due to expire, which will drive up the cost of products sold by Shein and its rival fast fashion company Temu. This will in turn likely raise prices for American shoppers who had flocked to those retailers instead of Amazon.
The news follows reports from earlier in the week that Apple is planning to deal with the tariffs on goods made in China by bringing more Indian-made iPhones to the U.S. As the Wall Street Journal reported, the tariffs on products coming from India are 26%, half of the levy charged on goods imported from China.
Meanwhile, forthcoming research by PYMNTS Intelligence — set to be published Wednesday (April 9) — examines the impact of the tariffs on smaller businesses.
As noted here Tuesday, these small- to medium-sized businesses (SMBs) could be in for “acute pain” as the tariff situation drags on and the chances of a recession increase.
“While large companies typically have financial safety nets through retained earnings, lines of credit and options such as raising capital through debt or equity offerings, fully half of all U.S. SMBs — the backbone of the American economy — currently rely on their day-to-day sales just to keep the lights on,” PYMNTS wrote. “Nearly one in five are pessimistic about their odds of survival over the next two years. Almost 7% think they might not make it.”
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