US tariffs push Shein to shift production from China to Vietnam
Ultra-fast fashion giant Shein is reportedly urging its key Chinese suppliers to establish production bases in Vietnam as a strategy to bypass new US tariffs on Chinese goods. According to Bloomberg, Shein is offering attractive incentives to suppliers making the move, such as procurement price increases of up to 30% and promises of larger orders.
This strategic push appears to be a direct response to the US government’s decision to eliminate the “de minimis” rule, which previously allowed direct-to-consumer shipments under $800 to enter the US duty-free. The removal of this exemption marks a significant shift, as companies like Shein and its competitor Temu heavily benefited from the policy.
A 2023 report indicated that Temu and Shein account for around 30% or more of the daily package deliveries to the US under the de minimis clause. The same report noted that roughly half of all shipments qualifying for this status originate from China, underscoring the reliance of these retailers on low-cost Chinese manufacturing and streamlined shipping.
With the de minimis provision eliminated and an additional 10% tariff on Chinese goods announced as part of former US President Donald Trump’s broader trade agenda, the pressure on fast fashion brands to diversify their supply chains has intensified.
Though reports suggest Shein is moving swiftly to expand its production footprint in Vietnam, the retailer is reportedly denying these claims. Still, the potential shift could signal a broader trend of fashion manufacturers seeking alternative production hubs in Southeast Asia to mitigate the financial impact of rising trade barriers.
Vietnam has long been a favorable destination for textile and apparel production, offering competitive labor costs, well-established manufacturing infrastructure, and trade agreements with major markets like the US and the EU.
As Shein navigates these evolving trade dynamics, its reported push to relocate supply chains could reshape the landscape of global fast fashion production, with Vietnam emerging as a critical player in the industry’s future.
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