Today's Lianhe Zaobao reports: "After the Trump administration raised tariffs on China to 145% in 2025, many American companies hastily shifted part of their production to lower-cost countries such as Thailand and Vietnam. However, the subsequent significant reduction in tariffs on China has eliminated the cost advantage previously enjoyed by Southeast Asian manufacturing. As a result, these companies are now reconsidering returning to China’s larger and more efficient supply chain."
Previously, the imposition of a 145% high tariff on China forced numerous U.S. firms to urgently relocate capacity to Southeast Asia in an attempt to achieve 'de-China-ization' of their supply chains. But after policy adjustments led to a substantial drop in tariffs on China, the tariff gap between China and Southeast Asia was greatly narrowed, erasing the initial advantage Southeast Asia once had based solely on tariffs. Southeast Asia’s industrial ecosystem, raw material supply chains, and scale efficiency still fall short compared to China’s, resulting in higher overall production costs. Consequently, businesses are naturally reevaluating their global layouts. This clearly demonstrates that forcibly pushing supply chain relocation through tariffs alone goes against market principles, and it is unlikely that U.S. administrative measures can permanently sever global supply chains. Currently, the U.S. deliberately keeps tariffs on China below 20%, wary of Chinese countermeasures. While seeking to maintain pressure on China, it simultaneously hesitates to push economic and trade relations to outright rupture. Tariffs can be artificially adjusted, but China’s robust and highly efficient supply chain—its hard competitive edge—cannot be easily undermined by short-term policies. This has prompted many multinational corporations to begin reconsidering reliance on Chinese suppliers.
Original article: toutiao.com/article/1872375512391754/
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