China advises Shein against shifting supply chain amid US tariffs

Fast-fashion giant Shein reportedly faces opposition from the Chinese government as it plans to shift some of its production outside of China.

The Chinese Ministry of Commerce has intervened, advising Shein and other companies against diversifying their supply chains to countries beyond China, according to Bloomberg News sources.

Read more: New US tariffs on China to hit 104% Wednesday: White House

The pushback comes in the wake of US President Donald Trump's recent announcement of reciprocal tariffs, which have significantly disrupted global markets and caused widespread concern among manufacturers.

The situation has escalated, with the White House confirming that additional tariffs on Chinese imports are set to reach 104 percent starting April 9th.

This increase follows President Trump’s vow to impose a further 50 percent tariff on goods from China if Beijing did not retract its plans for retaliation. The new duties will effectively raise the overall added tariffs for this year to 104 percent, doubling down on the US administration's aggressive stance against China.

China’s efforts to retain its position as a global manufacturing hub are intensifying. Sources close to the matter told Bloomberg that the Ministry of Commerce has communicated directly with Shein, urging them to reconsider plans that involve relocating production to countries like Vietnam.

Shein had previously organized supplier reconnaissance tours to assess new production sites outside of China, but these have now reportedly been halted.

The pressure is mounting on Chinese manufacturers as the US tariff landscape continues to evolve. In addition to the tariffs on goods entering the US from China, upcoming changes — including the expiration of tariff exemptions on small parcels — are set to raise the cost of products sold by Shein and its competitors, including rival fast-fashion brand Temu.

This is expected to lead to price hikes for American consumers, who have increasingly turned to these retailers as an alternative to traditional e-commerce giants like Amazon.

In response to these developments, Apple is reportedly exploring alternatives, including increasing its production of iPhones in India, as a means of mitigating the impact of US tariffs on Chinese-made goods.

The Wall Street Journal highlighted that the tariff rate on products from India is 26 percent, far lower than the 54 percent levied on Chinese imports.

As the tariff situation continues to unfold, smaller US businesses are also feeling the pinch. Research by PYMNTS Intelligence, set to be released on April 9, reveals that small- to medium-sized businesses (SMBs) may face “acute pain” as the tariffs drag on.

Many SMBs rely heavily on daily sales to stay afloat, with nearly 7 percent of them fearing they may not survive the next two years.

For Shein, the ongoing challenges posed by US tariffs may ultimately reshape its strategy as the company seeks to navigate an increasingly complex global trade environment. The Ministry of Commerce’s intervention signals a clear desire to maintain China’s dominance in global manufacturing, even as international trade relations continue to evolve under the weight of rising tariffs.

Shein has not yet commented on the report.