China Trade and China Tariffs: What Happens When You Decide to Leave China?
New white paper available. Should you reshore now or wait?
The hottest trend in US manufacturing is Reshoring. According to a recent study by Boston Consulting Group, 54% of all US companies over $1 billion in revenues are planning or considering bringing at least some of their manufacturing back to the US.
But just how attractive is it to leave China? Should you reshore now? This decision isn’t an easy one. With nearly 350 million people in China’s middle class and growing, China is likely to be a big target market over the next 20 years. As the Chinese middle class grows, so does its disposable income and the desire for all kinds of products, particularly those with Western brand names.
At the same time, American boards and executives are pushing to increase manufacturing in the US and bring some of the outsourced production home. This represents a significant shift in thinking from determining where in the world to manufacture in order to take advantage of low-labor and other costs, to considering a more global manufacturing strategy. Most of the cost comparisons and time-to-market research suggests that companies should be manufacturing local products in local markets. Now companies are deciding what part of their manufacturing they can peel off from China and bring back to the US, and what can be left in China to address the local and rapidly growing market there.
Wait a minute…it’s not that easy. Companies cannot expect to simply pack up shop, lock the doors, turn out the lights, and move back to the US. There are many issues to consider when leaving China.
If you would like to reshore now (or later), or if you are rethinking your supply chain in light of new China tariffs, or if you are interested in partnering in order to attract more manufacturing to your region, please feel free to contact us.