The road ahead for Asian supply chains

The nearly 12-month trade war between the U.S. and China has caused panic to supply chains across the Asia-Pacific region – and it seems the feeling may persist for years. Many companies are beginning to restructure their supply chains away from China.

If you are sourcing from China and feeling uncertain about what the future will bring, breathe a little. There are other countries that you can turn to.

Vietnam has been a major beneficiary of the longer-term relocation out of China tendencies. Some of the most important electronics manufacturers are already shifting their production to the country.

Vietnam’s government has announced plans to aggressively pursue exporters that have relabeled Chinese exports as if they were from Vietnam in order to avoid U.S. duties.

Notable examples where there has been a shift from China to Vietnam have arisen in the lower-technology manufacturing segments, including furniture and electrical cabling, where we are already seeing companies exchanging China for Vietnam as supplier.

Vietnam’s rise in exports to the U.S. has accompanied China’s decline over the past 12 months. Chinese exports to the U.S. fell 14.5% in dollar terms in the three months to Apr. 30, or by $17 billion over the three-month period. Meanwhile, Vietnam’s climbed 34.5% (or by $3.80 billion).

If you are searching for a new place to source because you have been affected by the new tariffs, Vietnam might be the place to go.

It is not easy to shift a supply chain, considering logistics. At EP America, we have a wide network of trusted strategic partners covering all Asia – and developed relationships in Vietnam – that can help us move anything via air or ocean to the U.S.

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