Some firms return production to China as tariff-driven shift proves hard to replicate
This digest was compiled by AI from multiple sources — links to the originals are below.
Some companies that shifted production out of China to avoid U.S. tariffs are bringing manufacturing back after struggling to replicate China's factory ecosystem. U.S. retailer Target and Chinese fast-fashion firm Shein are among those restoring or scaling back operations in China. The moves come ahead of an expected meeting between U.S. President Donald Trump and Chinese President Xi Jinping this month.
Key Facts
- Dawang Metals, a family-owned metal casting company in Dandong, China, regained orders from a U.S. customer that had shifted to India but returned after encountering problems there.
- U.S. retailer Target has moved some orders back to Chinese suppliers due to supply-chain disruptions and production constraints, according to two people familiar with the matter.
- Chinese fast-fashion retailer Shein is scaling back some operations in Vietnam, according to people familiar with its operations there.
- Jin Chaofeng, an outdoor furniture exporter in Hangzhou, shut a workshop in Ho Chi Minh City that he opened in 2024 and moved production back to China this year.
- Rival manufacturing hubs India, Indonesia and Vietnam have attracted investments from electronics, automotive and other manufacturers despite persistent concerns.
Returning Production
Dawang Metals, based in Dandong, China, regained orders from a U.S. agricultural machinery customer that had shifted some orders to India but returned after running into problems there. Dawang also explored moving some production offshore before abandoning the plan, according to vice president Heather Kuang. Kuang said China's supply-chain advantage remains too great and domestic production is difficult to replicate elsewhere. Jin Chaofeng, an outdoor furniture exporter in Hangzhou, shut a workshop in Ho Chi Minh City that he opened in 2024 and moved production back to China this year.
Corporate Moves
U.S. retailer Target has moved some orders back to Chinese suppliers, two people familiar with the matter said, citing supply-chain disruptions and production constraints. The sources did not disclose the value or duration of the orders. Shein, the Chinese fast-fashion retailer, is scaling back some operations in Vietnam, according to people familiar with its operations there. Target and Shein did not immediately respond to requests for comment.
Broader Supply Chain Trends
Companies continue to invest in Southeast Asia's manufacturing hubs, but the 'China plus one' push has proved harder to execute. There is not yet hard data showing how much sourcing is returning to China, but some buyers said they are keeping or restoring Chinese suppliers because factories abroad struggle to match its skilled labour, supplier networks and reliable power. Rival manufacturing hubs India, Indonesia and Vietnam have attracted investments from electronics, automotive and other manufacturers despite persistent concerns. The shifts are unfolding ahead of an expected meeting between Trump and Xi Jinping this month, which businesses will watch for clarity on a proposed mechanism to lower barriers on some non-sensitive goods.
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