China has advised Singapore-based online fast-fashion retailer Shein not to move its supply chain abroad, Bloomberg reported Tuesday, citing sources.
The report said China's Ministry of Commerce communicated with Shein and other companies about diversifying their supply chains days before Trump announced reciprocal tariffs.
The authorities hoped to avoid an exodus of manufacturing supply chains under the impact of the U.S. tariff hikes.
In response to Beijing's request, Shein has reportedly halted reconnaissance tours it had arranged for its key Chinese suppliers of factories in Vietnam and other Southeast Asian countries.
Many suppliers are under pressure from their customers as most Chinese products entering the U.S. will face tariffs of at least 54%.
They will either have to shoulder most of the tariff burden or consider shifting production elsewhere to reduce costs.
Shein, which relies heavily on Chinese supply chains, has borne the brunt of this and is therefore preparing to shift its supply chain as well.
Reports in February said Shein offered incentives to some of its top apparel suppliers to add production lines in Vietnam after Trump threatened to eliminate the de minimis rule, a tariff exemption for small packages under $800.
As of May 2, that tariff exemption will no longer apply to packages from mainland China and Hong Kong, which will leave merchants on the hook for billions of dollars in additional taxes.