Companies return to China after tariff-driven exodus

BEIJING: A year after shifting production and sourcing away from China to evade higher US tariffs, some companies are finding it challenging to replicate the country's factory ecosystem and are bringing manufacturing back. Heather Kuang, vice president of Dawang Metals, a family-owned metal casting company in Dandong, China, explained that a major US customer had recently returned with new orders after facing issues in India.

Kuang noted that China's supply-chain advantage remains too significant to be easily replicated elsewhere. While companies continue to invest in Southeast Asia, the "China plus one" strategy has proven more difficult to execute. Despite the lack of concrete data on return of sourcing to China, buyers who had moved production to other countries believe that Chinese suppliers are retaining or restoring their presence due to factors such as skilled labor, supplier networks, and reliable power.

As the US and China prepare for an upcoming meeting between President Trump and President Xi Jinping, businesses are closely monitoring the situation for potential clarity on measures to alleviate supply-chain barriers.