Chinese exporters are reconsidering investment in offshore factories as US tariffs on alternative hubs and new restrictions on “transshipment” force a sweeping rethink of supply chains in Asia, reports the Financial Times. Manufacturers have poured billions of dollars into south-east Asia in recent years as part of a “China plus one” strategy to minimise their exposure to US tariffs in the wake of Trump’s first trade war with Beijing.
But the US has slashed additional duties on Chinese goods to 30% amid trade talks with Beijing, and imposed tariffs ranging from 10 to 40% on other countries in the region.
For the most part, tariffs on south-east Asian countries remain lower than the average levies on Chinese goods, including pre-existing duties and product-specific tariffs. But Trump’s tariff barrage has reoriented the region’s commercial landscape, eating into manufacturers’ margins and undercutting their incentives to invest in moving production away from China.