Tariffs have worked to bring China closer to the rest of the world in competitiveness, but it is still far and away the world leader in manufacturing due in part to all of the transfer of technology from multi-national companies who have been operating factories here since the 1980s, and the resulting infrastructure of component and finished goods manufacturers now operating there across all industries and products. Additionally, the strong factories have become incredibly cost efficient due to the Chinese being very industrious hard-working people, and their highly competitive wage model. Most often we see lower cost labor countries continue to lag behind China’s competitiveness due to this combination of factors.  Therefore, even with the higher tariffs added to the prices of goods produced in China, the total cost is still typically lower than they would be producing the goods in the US or in other countries with lower production wage rates.

For some select products, prudent manufacturing strategy has already relocated to lower cost labor markets in Asia that also have lower import duties to the U.S., and for those types of products we are sometimes already sourcing them in these optimal locations. When our sourcing strategy extends to Vietnam or elsewhere outside of China, we have extended our inspection teams to be able to provide QA support for factories located there.