New tariffs are in effect, but we are still far from a certain trading landscape. Here’s what (and where) brands can consider as supply chains are reworked.
Source based on country capability, tariff levels, and relative stability of relations with the US.
It’s a moving target (and has been for the last 4 months), but the time to “wait and see where tariffs end up” is now beyond us.
If you’re unsure of where to look for a manufacturing partner, the below notes may be of help. Note that these lists are based on what we have seen in our work and are not exhaustive.
For a full breakdown of how to evaluate and select a sourcing country, see our Complete Guide to Sourcing from Asia.
Vietnam (20%):
Relatively low tariffs and high stability, as long as their promise to crack down on transshipment holds. Growing exports and familiarization with compliance requirements for foreign markets. Explore for:
- Textiles and apparel
- Furniture (wood and metal)
- Metals – aluminum extrusion, sheet metal fabrication, die casting
- Precision CNC machining
- Plastic injection molding
India (50%)
Previously expected to be the favored alternative to China, but now facing tariffs even higher than China. We think this number will end up significantly reduced in the near future. Explore for:
- Modular furniture
- Aluminum extrusions
- Precision CNC machining
- Kitchen disposables and restaurant supply
- Toys (3D puzzles, flash cards, cotton plushies, wooden toys)
China (30% + previous 301 tariffs by product)
Strongest across-the-board manufacturing capabilities. Manufacturers are likely to view new US customers as short-term engagements, increasing risk of quality issues. It is more important now than ever to work with an in-country team and ensure all standard processes are in place. Explore for:
- Complex products requiring multiple upstream suppliers
- E-commerce (can make just about anything and has comprehensive in-country logistics resources)
- Construction – from fasteners and hardware to porcelain and stone countertops
- Turn-key products – generally good ODM capabilities if you don’t want to get your hands dirty with CAD drawings and industrial design
- Lower MOQs
Pakistan (19%)
Relatively low tariffs and so far no political flashpoints to suggest future tariff increases. Explore for:
- Bedding
- Towels
- Apparel
- Especially 100% cotton products
Future Outlook
Going forward, the conversation around sourcing is likely to change from “China alternatives” or “China +1” to “where is the best place to make our product?”
At First Link, we have in-house teams and strong partnerships in the above countries to grant clients access to a wide array of sourcing capabilities. Get in touch anytime to see how we can help you explore the best option for your business.
