The Great Manufacturing Migration Out of China
Global manufacturers are fleeing China in favor of less expensive and more stable and predictable nations.
Commentary
For the Chinese Communist Party (CCP) and Xi Jinping, U.S. President Donald Trump’s second term of tariff mania is “déjà vu all over again”—only much worse.
Trump Tariffs in 2018
You may recall that in 2018, the first Trump administration deployed $250 billion worth of tariffs against China, and the impact was felt almost immediately. In the ensuing months, the level of U.S. imports from China declined sharply.
Predictably, the U.S. decline in imports from China was largely balanced by a rise in imports from other countries with low manufacturing costs. However, even throughout the Biden administration, the outflow of manufacturers from China continued. It’s also important to note that the Biden administration largely left Trump’s tariffs against China in place.
Trump 2.0 Tariffs in 2025 Are Even Harder on China
Fast forward to today, and we’re seeing a massively expanded tariff policy from the Trump administration that’s altering entire global trading relationships.
We’re also seeing tremendous pushback from Beijing.
Where will this latest round of reciprocal tariff escalation lead?
Related Stories
Furthermore, the manufacturing shift away from China is not all a consequence of the Trump administration’s tariff policies.
US Firms Leading Stampede Out of China
For example, in a survey by the American Chamber of Commerce in China, up to 30 percent of American companies are either moving their supply chains out of China or thinking about it. That’s more than twice the number that did so in 2020 in response to Beijing’s overreactive COVID-19 lockdowns there.
Beijing’s Behavior on World Stage Is Problematic
Another compelling reason is the rising geopolitical tensions in that part of the world that go well beyond Beijing–Washington competition. Many of China’s customers’ concerns are driven largely by CCP aggression against neighboring countries, the Asia-Pacific region as a whole, and its global ambitions.
War games by Chinese military forces near Taiwan and other aggressive moves against the Philippines, Vietnam, and Japan have soured customers on doing business with China.
European companies are at least as pessimistic as American ones, if not more so. In a 2024 survey, nearly half (44 percent) of European Union Chamber of Commerce members see the future of business in China as bleak in terms of profitability going forward. They raised concerns similar to those of their American counterparts and noted that Beijing restricted access to China’s market. This was before the Trump administration took off in 2025 and the latest round of tariffs.
Other Countries Attracting Manufacturers
Companies that once had all their factories in China have now opened plants in Vietnam, India, Turkey, Mexico, and other locations that are closer to the markets where the products are sold and offer other competitive advantages, including lower labor costs, market access, and infrastructure.
This trend is unlikely to revert to China’s favor in the near future.
Welcome to the China Hustle
Today, China finds itself in hustle mode, as it faces a determined America under President Trump to challenge the CCP in every influential sphere, and leverage its advantages in regulation, legal recourse, financial leadership, and technological innovation to do so.
How effective will the CCP’s efforts be in weathering the radical changes underway in the global manufacturing and trading system?
It remains to be seen.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
