Fast fashion giant Shein is offering temporary incentives to its Chinese manufacturers to relocate part of their production to Vietnam, as a response to rising U.S. tariffs. According to Retail Gazette, these incentives include up to a 30% increase in procurement prices and guarantees for larger orders.
The move comes after U.S. President Donald Trump recently ended the Section 321 de minimis program, which previously allowed low-value packages from China to be shipped to the U.S. duty-free. The policy change is expected to increase the costs of inexpensive Chinese goods in the U.S., significantly impacting Shein and other businesses like Temu and Amazon Haul that rely on low-cost imports from China.
By expanding its production in Vietnam, Shein aims to reduce the impact of the new tariffs on its business model, which depends heavily on Chinese manufacturing. However, the company’s operations in Vietnam are not without challenges. The local government has recently required Shein to register its e-commerce services, following concerns over deep discounting practices by Chinese platforms and the potential sale of counterfeit goods.
Shein hopes that its strategic shift to Vietnam will help safeguard its competitive edge amid these regulatory and trade changes.
