Will the United States "loosen restrictions" on small packages? But are the hard times of textile workers really over? Data shows that in 2024, China's textile exports to the United States have shown a significant downward trend, while the share of Southeast Asian countries such as Vietnam has continued to rise. This round of operations seems favorable, but here comes the question: If tariffs are reduced, will orders come back?
The core contradiction currently faced by the textile industry is the game between tariff reduction and supply chain efficiency. Despite the reduction in tax rates, tariffs are still much higher than the average level before the pandemic, resulting in a significant compression of corporate profit margins. Meanwhile, Southeast Asian countries, with lower labor costs and more efficient logistics networks, are eroding the market share of Chinese enterprises.
In the first quarter of 2025, China's textile exports to the United States were only 8.7 billion US dollars, a year-on-year decline of 32%. Vietnam's exports to the United States reached 4.5 billion US dollars, increasing by 49% year-on-year. This waxing and waning trend highlights the importance of supply chain layout. Can the reduction of tariffs truly reverse the decline of Chinese textile enterprises? The answer might be hidden in the optimization and innovation of the supply chain.
Logistics costs halved, but profits eaten up?
This time, the US tariff adjustment has directly halved the logistics costs of platforms like Shein and Temu. However, the underlying contradiction lies in the fact that the 54% tax rate is still three times higher than before the pandemic. The owner of Yiwu Small Commodities City did the math and found that 15% of the profit per order was still eaten up. Even more magical is that some cross-border e-commerce enterprises in Shandong have achieved significant growth through overseas warehouse layout, while 23% of small and medium-sized sellers relying on direct mail have gone bankrupt. This reflects that the resilience of the supply chain is more important than tax rates. Currently, in the Guangzhou fabric market, the "three-thirds system" is prevailing: 30% of the products are sold domestically, 30% are transshipped through Southeast Asia, and the rest are struggling to withstand tariffs, all betting on the outcome of the November general election.
After the reduction of US tariffs, the logistics costs of cross-border e-commerce platforms such as Shein and Temu have indeed decreased significantly, but their profits have not increased in tandem. Take Yiwu Small Commodities City as an example. Although the logistics cost has dropped by 50%, the profit per order has still been compressed by 15%. The main reasons are the increase in raw material prices and the intensified competition in Southeast Asia.
Data analysis: In the first quarter of 2025, cross-border e-commerce enterprises in Shandong achieved a 70% growth against the trend through overseas warehouse layout, while the bankruptcy rate of small and medium-sized sellers relying on the direct mail model was as high as 23%. Data shows that the average logistics time of the overseas warehouse model is 3 days, while that of the direct mail model is 7 to 10 days. The difference in time directly affects the customer experience and repurchase rate.
Impact analysis
Short-term shock: Enterprises need to quickly adjust their supply chain strategies to avoid a broken capital chain due to profit compression.
Mid-term adjustment: Shift to overseas warehouses or Southeast Asia transfer models to enhance supply chain efficiency.
Long-term trend: The localization and diversification of supply chains will become the core competitiveness of enterprises.
A certain company in Qingdao has reduced the order delivery time in the US market from 7 days to 3 days through overseas warehouse layout, and its sales in the first quarter of 2025 increased by 70% year-on-year. In contrast, the average sales of peer enterprises that rely on direct mail have declined by 30%.
This change not only highlights the importance of supply chain optimization, but also will force enterprises to accelerate their global layout.
Vietnam delivery within 7 days. What are you waiting for?
Ultimately, the tariff war is just a superficial phenomenon; the real line of life and death lies in the speed of the supply chain. It is suggested that enterprises take a three-step approach: in the short term, use a transfer warehouse in Mexico to avoid the 25% industry tariff; in the medium term, transfer digital printing and other processes to Cambodia (with 40% lower labor costs); in the long term, they must learn from Shandong enterprises to adopt a combination of "best-selling products + overseas warehouses". Remember, while Americans are still arguing over 54%, the Vietnamese have already snatched away your customers with the promise of "7-day delivery".
Vietnamese enterprises are rapidly seizing the US market with their efficient logistics networks and low labor costs. Data shows that Vietnam's exports to the United States are generally faster than those to China, thanks to its geographical location and logistics advantages. In the first quarter of 2025, Vietnam's textile exports to the United States increased by 49% year-on-year, while those to China declined by 32%. The labor cost in Vietnam is only 60% of that in China, and the logistics efficiency is higher.
Impact analysis
Short-term impact: Chinese enterprises need to rapidly optimize their logistics channels and shorten delivery times.
Mid-term adjustment: Transfer some production links to Southeast Asian countries to reduce costs.
Long-term trend: Build a global supply chain network to enhance overall competitiveness.
A certain textile enterprise in Shandong Province transferred its digital printing process to Cambodia. The labor costs in Southeast Asian countries such as Cambodia are significantly lower than those in China, and the profit margin increased by 12% in the first quarter of 2025. Meanwhile, some enterprises are exploring the optimization of their supply chains through Mexican transfer warehouses.
This change not only requires enterprises to respond quickly to market changes, but also will promote the reconstruction of the global supply chain.
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