Recently, many U.S. companies have been discussing other sourcing alternatives instead of China, making some ask, “Are China Imports Declining?” For over a century, most labels on goods in the U.S. have had “Made in China” written on them. Single-sourcing imports have always had their benefits and drawbacks. The risks of single-sourcing from China had become more apparent not long ago.
Why Are China Imports Declining?
The coronavirus accelerated present risks and disrupted the supply chains of numerous importers from China. Ports all over China were closed or working at limited capacity due to the pandemic. This created a backlog in freight shipping and challenges for shippers and their customers. Years before the coronavirus was present, the imports from China were already lessening for several reasons. An example of a reason was that the tariff costs that importers had to pay rose to over 20%.
Companies that manufactured goods in China also had intellectual property theft issues. This is the robbery of a company’s products and ideas for their usage. The environmental impact of importing from China was another factor that companies looked at. Producers in China use specific production methods that the U.S. prohibits. This means the environmental effect may be more significant when companies manufacture goods in China instead of the U.S.
Other Alternatives
As companies looked at other options for sourcing, countries like Vietnam became attractive. The country is politically stable and has various growing industries, such as automotive and electronics. The labor costs are also relatively low, making it an ideal candidate for manufacturing companies to move to. Over the past few years, imports from Vietnam and other Asian countries have risen considerably. However, the risks, such as infrastructure and the worry for human rights, remained.
Instead of outsourcing the imports from Asia, another substitute is outsourcing from somewhere closer, like Mexico or Latin America. Mexico is already one of the biggest trading countries with the U.S. The proximity is also a huge benefit for companies that rely on imports. Trucks may become an increasingly popular conveyance method for imports entering the U.S.
Can Reshoring Back to the U.S. Become More Common?
One of the many solutions was to bring the manufacturing of goods back to the United States. There are various advantages and disadvantages associated with moving manufacturing from China to the U.S. One of the main benefits is that the transport times become significantly shorter. Shippers do not need to import into the U.S. from countries that may be far away. Also, if manufacturers make the goods in the U.S., no duties for imports have to be paid.
Despite this, reshoring back to the U.S. may be a difficult task. This is because many companies that outsource to different countries have done so for decades. Going backward on a supply chain with the same process for decades takes time. Offshoring manufacturing to foreign countries also tends to provide cheaper production costs, which can benefit companies instead of reshoring.
A1 Worldwide Logistics
Although the locations where shippers bring in freight may become more diverse, the number of U.S. imports is still increasing. If you plan to ship to and from the U.S., A1 Worldwide Logistics is here to help. We have freight forwarding services for both imports and exports. Call us at 305-821-8995 to get a quote for your shipment.
