As Shein eyes overseas factories, Beijing steps in—making clear who’s really in control of the supply chain.
As Trump’s 104% tariffs hammer Chinese exports, Beijing is now pressuring firms like Shein to stay put—whether it makes economic sense or not.
China tells Shein: stay or else
Here’s the kicker: China doesn’t want Shein to leave—even as brutal new U.S. tariffs make staying a money-losing move.
According to Bloomberg, China’s Ministry of Commerce has stepped in to stop Shein from moving any meaningful part of its supply chain out of the country. That includes halting factory scouting trips to Vietnam and other lower-tariff countries.
This isn’t a casual ask. It’s part of a broader crackdown to prevent a manufacturing exodus as Trump’s “reciprocal tariffs” kick in—now totaling up to 104% on Chinese imports into the U.S.
And yes, China’s hitting back: it just slapped 84% tariffs on U.S. goods in response.
Why Shein (and others) want out
Before the tariffs hit, Shein was already dabbling in overseas production. Diversification makes sense when you’re shipping millions of $10 tops to price-sensitive U.S. consumers. But now?
- Most Chinese exports to the U.S. face at least 54% tariffs
- Exemptions on “small parcels” are set to expire, killing the de minimis loophole
- Temu, Shein, and similar DTC models are staring down rising costs and shrinking margins
- Apple, not exactly a low-margin business, is already shifting more iPhone production to India to dodge the same tariffs, where duties sit around 26%
Moving out of China isn’t some geopolitical betrayal—it’s financial survival.
Beijing’s economic nationalism is back
This isn’t about fashion—it’s about control. Beijing sees Shein as a symbol of China’s ecommerce dominance, and it’s not about to let one of its biggest exports (in both senses) walk away quietly.
The PYMNTS report suggests the pressure campaign isn’t limited to Shein, either. Other exporters have been “advised” to reconsider global sourcing.
Translation: stay in China, eat the margin hit, and play ball with Beijing. Or else.
What it means for operators
📦 For DTC brands: That Shein $8 tank top? Might cost $12 soon. Fast fashion just got slower and pricier.
🧾 For SMBs: PYMNTS Intelligence data says it bluntly—half of small U.S. businesses live sale-to-sale. Now they’re eating tariff markups or passing them on to customers already stretched thin.
✂️ For sourcing teams: Diversification isn’t optional anymore. India, Vietnam, and even Mexico just became mission-critical, no matter what Beijing says.
🛒 For consumers: Welcome to the new reality—where “cheap” from China isn’t cheap anymore. Expect price hikes, thinner selection, and slower delivery.
The bottom line
This isn’t just Shein’s problem. It’s a warning shot for every U.S. business that relies on Chinese supply chains. Trump’s tariffs were the match. Beijing’s reaction is the accelerant.
The message from both sides? Globalization is out. Economic nationalism is in.
