Shein Shifts Production to Vietnam Amid Rising U.S. Tariffs

The US has imposed steep tariffs—up to 145%—and is ending the 'de minimis' exemption for Chinese imports, threatening the business model of fast-fashion giants like Shein, which relies on cheap, duty-free goods and rapid production in Guangzhou's so-called 'Shein villages.' As a result, Shein's local orders to Chinese factories have reportedly dropped sharply, with some manufacturers experiencing up to a 50% decline in business as Shein encourages top suppliers to expand in Vietnam to circumvent US tariffs. While Shein officially denies a major shift in supply chain capacity out of China, it acknowledges increasing its number of Chinese suppliers, and industry experts warn that relocating production could undermine Shein's hallmark speed and low prices. The changes have left factory owners in China uncertain about their future, with many facing stark choices between relocation and closure. These developments not only impact Shein's global logistics and potential IPO ambitions, but also put thousands of Chinese garment workers' livelihoods at risk. The situation underscores broader questions about the sustainability of ultra-fast fashion in the face of rising trade barriers and changing global trade rules.