Relocating to Vietnam pays only while unit costs stay within 13% of China's

The July tariff rates decide how much cost headroom a move abroad actually buys. EIU put the effective US rate on Chinese goods at about 20%, Vietnam at 6.1%, Indonesia at 13.4% and Thailand at 4.5% ^[16]. Call the unit cost in China C and the Vietnamese one V. Landed cost is C x 1.20 against V x 1.061, and the two are equal when V runs 13.1% above C ^[22]. Thailand's rate leaves 14.8% ^[24]. Missing tooling, retraining, slower lines and unplanned outages all have to fit inside that.

Duty is charged on the customs value of the goods, so the comparison holds only if both factories buy the same inputs at the same price, and Jin Chaofeng's did not. The Hangzhou garden furniture exporter closed the Ho Chi Minh City workshop he opened in 2024 and moved production back to China this year ^[13]. He could not find the equipment he needed in Vietnam, and had basic parts including screws and coaster moulds shipped in from China ^[14]. Jin said that once he counted all the costs the total was not much lower, so there was no point in moving production, in mezha.net's Ukrainian rendering of the Reuters interview ^[15].

Power sits in the same budget. Reliability of supply now matters to manufacturers as much as the tariff rate, and energy problems have sharpened with the Middle East crisis and a jump in oil prices, according to the report ^[18].

The one hard cost premium on the record comes from a Polish packaging buyer. DST Pak takes 80% of its product from a factory in Shenzhen and 10% each from long-established backup plants in the United States and Europe ^[19]. Its head, Stanislaw Krykun, puts that alternative production at two to three times the per-unit cost ^[20]. Those backups are American and European, and the product is packaging; for the same multiple to describe a Vietnamese or Indian plant, the wage, tooling and volume gaps would have to be the same there. Krykun said that in any crisis Chinese manufacturing plants will be the most stable of those a buyer can use ^[21].

Precise data on the scale of orders returning to China is not available, and India, Indonesia and Vietnam are still drawing large investment into electronics and vehicles ^[8][9]. Shein is cutting some of its operations in Vietnam ^[12]. Dawang Metals, a metals firm in Dandong in China's northeast, lost orders when a large American customer moved them to India, then took new orders from that customer after it hit production problems there ^[5]. Heather Kuang, a vice president of the family-owned company, said China's advantage in supply chains is still too great and that reproducing domestic production in another country is very difficult; she did not name the customer ^[6][7]. Her own firm considered moving some production abroad and dropped the plan ^[7].