For manufacturers, importers, and sourcing teams, few topics have reshaped global supply chains more than the ongoing tariff tensions between China and the United States. Even though the peak of the trade war began years ago, its impact on production costs, sourcing decisions, and global manufacturing strategies is still very real.
With tariff updates continuing and new product categories being added or adjusted, many companies are once again reviewing their supply chains. One of the biggest outcomes of this shift is the acceleration of manufacturing movement from China to Vietnam. For many businesses, Vietnam has become a practical way to avoid tariff pressure and reduce landed costs without sacrificing quality.
This article provides a clear breakdown of China–US tariffs, current rates, exemptions, and, most importantly, how companies can adapt by exploring alternative sourcing destinations such as Vietnam.
Key Takeaways
- China–US tariffs continue to raise the landed cost of goods imported from China, affecting thousands of product categories in 2025.
- Section 301 tariffs remain the largest cost driver, with many goods facing an additional 10–25 percent duty.
- Tariff exemptions exist but are inconsistent and often temporary, making long-term planning difficult for importers.
- Higher labor costs, geopolitical risk, and supply-chain concentration are pushing businesses to diversify away from China.
- Vietnam has become one of the strongest alternatives thanks to competitive production costs, stable relations with the United States, and excellence in sectors like footwear, furniture, apparel, and consumer goods.
- Shifting production to Vietnam helps importers avoid tariff exposure, reduce overall supply-chain risk, and improve pricing competitiveness.
- Companies adopting a dual-sourcing or Vietnam-first sourcing strategy gain more resilience against tariff changes and global uncertainty.
Table of Contents
- Snapshot: What Tariffs Look Like Right Now
- Timeline and Key Milestones: How Tariffs Have Evolved Since 2018
- What Are China–US Tariffs? A Simple Breakdown
- Exceptions, Exemptions & Carve-Outs: What’s Not Subject to Tariffs
- How Tariffs Affect Import Costs and Supply Chains
- Why Companies Are Rethinking Sourcing from China
- Why Vietnam Is an Attractive Alternative for Importers
- Vietnam vs China: Which Is Better for Your Product Category?
- How Importers Can Reduce Tariff Costs by Sourcing from Vietnam
- What Importers Should Watch for Next: Tariff Trends and Policy Signals
- How VALO Helps Importers Navigate Tariff-Driven Shifts
- Your Next Move in a Changing Global Trade Landscape
- Frequently Asked Questions (FAQ)
What Are China–US Tariffs? A Simple Breakdown
China–US tariffs are additional import duties the United States imposes on goods from China. These duties significantly increase the final landed cost of Chinese products imported into the U.S.
Read more: Vietnam, China, and US Trade: Opportunities and Challenges in Global Sourcing
The tariffs generally fall into three categories:
1. Section 301 Tariffs
These are the most important and impactful tariffs for manufacturers. They cover thousands of product categories including electronics, machinery, furniture, footwear, textiles, plastics, metals, and more.
2. Anti-Dumping (AD) and Countervailing Duties (CVD)
These apply to specific goods where the U.S. government believes China is selling below fair value or offering harmful state subsidies. AD/CVD duties can be extremely high, sometimes over 100%.
3. General Customs Duties
Standard customs duties apply to all importing nations, but Section 301 tariffs are what dramatically raised the cost of many Chinese products.
The result: many businesses have experienced increases of 10–25 percent, or even more, on goods imported from China.
Timeline and Key Milestones: How Tariffs Have Evolved Since 2018
To understand why sourcing is changing, it’s helpful to look at how tariffs have progressed over time. Here’s a simplified timeline:
2018: The Start of the Trade War
- The U.S. imposes the first rounds of tariffs under Section 301.
- Billions of dollars’ worth of Chinese goods are affected.
- China retaliates with tariffs on American agricultural and industrial products.
2019: Tariff Expansion
- New tariff lists are introduced, covering consumer goods like apparel, footwear, electronics, and accessories.
- Average U.S. tariffs on Chinese imports rise from around 3% to above 20% across many categories.
2020: Partial Rollbacks and Phase One Agreement
- Some tariffs are reduced or postponed.
- Others remain fully in place.
- Businesses remain uncertain, and many begin diversifying sourcing.
2021–2023: Tariffs Remain Mostly Intact
- Changes in administration do not remove the trade war tariffs.
- Companies shift more production to Southeast Asia, particularly Vietnam.
2024–2025: Adjustments and Targeted Increases
- The U.S. maintains most Section 301 tariffs.
- Some product categories receive exemptions.
- New geopolitical tension leads to renewed tariff reviews.
The consistent message across every phase: tariffs have stayed high, creating long-term sourcing challenges for importers dependent on China.
Snapshot: What Tariffs Look Like Right Now
While exact rates vary by product, the 2025 tariff environment generally includes:
Average Tariff Ranges
- 10–25% additional duties on most consumer and industrial goods from China.
- Higher rates for products under anti-dumping orders (steel, aluminum, solar parts, plastics, certain chemicals).
- Specific exclusions for select medical devices, machinery, and components.
Industries Most Affected in 2025
- Electronics and electronic components
- Furniture (especially wooden furniture)
- Machinery and mechanical parts
- Footwear and apparel
- Toys and sporting goods
- Plastics and packaging
- Household goods and consumer items
Industries With Partial Relief
Some categories continue to receive temporary exemptions or reduced tariffs, depending on trade negotiations. But these exemptions are often time-limited and unpredictable.
For most importers, this environment leads to higher per-unit costs, more paperwork, and more uncertainty.
Exceptions, Exemptions & Carve-Outs: What’s Not Subject to Tariffs
Not every product entering the U.S. from China faces the same tariff level. Some exemptions are available for:
- Certain industrial machinery and components
- Select medical or diagnostic equipment
- Some chemicals and raw materials
- A few specific electronic components
- Replacement parts essential for U.S. manufacturing
Still, exemptions can expire with little notice. Importers relying on Chinese goods must constantly monitor tariff updates, something many small and medium-sized businesses struggle to do consistently.
This unpredictability is one of the main reasons companies have accelerated their shift into Vietnam and other Southeast Asian markets.
How Tariffs Affect Import Costs and Supply Chains
Tariffs have consequences beyond higher prices. They affect how businesses plan, operate, and grow.
Read more: Are Tariffs Good or Bad? Understanding Their Impact on Global Trade
1. Higher Landed Costs
A product with a normal landed cost of $10 per unit may increase to $11–$12.50 purely because of tariffs. Multiplied across thousands of units, this drastically reduces margins.
2. Reduced Pricing Competitiveness
Many importers pass the increased costs onto buyers, making their products less competitive in the U.S. market.
3. Inventory and Forecasting Challenges
With tariff rates subject to change, forecasting becomes more difficult. Businesses often need to stock more inventory to protect themselves from sudden adjustments.
4. Pressure on Profitability
Tariffs directly impact the bottom line and force companies to rethink their long-term sourcing strategies.
5. Supply Chain Diversification Becomes Essential
Tariffs revealed how dependent businesses were on a single country for production. Diversifying, especially toward Vietnam, helps reduce risk.
Why Companies Are Rethinking Sourcing from China
Tariffs are only one part of the story. Importers are shifting away from China due to:
1. Rising Labor Costs
Wages in China have been increasing steadily for years, making production less cost-competitive.
2. Geopolitical Volatility
Trade tensions continue to create a level of uncertainty many companies want to avoid.
3. Overdependence on One Supply Source
Having 80–100% of manufacturing in one country concentrates risk.
4. Increased Scrutiny on Chinese Supply Chains
Compliance requirements for Chinese goods are becoming stricter, especially in the U.S. and EU.
5. Global Brands Are Already Making the Move
Companies across industries, including brands like Nike, Crocs, and Jordan, have shifted significant sourcing volumes to Vietnam. This has strengthened Vietnam’s manufacturing ecosystem and attracted better technology, systems, and skilled labor.
Read more: China Sourcing Risks Explained: Supply Chain, Quality, and Compliance
Why Vietnam Is an Attractive Alternative for Importers
Vietnam has emerged as the strongest alternative to China, especially for companies looking to avoid tariff exposure.
1. No Section 301 Tariffs
Goods from Vietnam do not face the same additional duties that apply to Chinese products. This immediately lowers landed costs for U.S. importers.
2. Competitive Labor and Production Costs
Vietnam offers lower labor costs than China while maintaining strong technical skills and production capability.
Read more: Why Is Vietnam So Cheap? The Real Reasons Behind the Low Costs
3. Strong Export Relationship with the United States
The United States is one of Vietnam’s largest export partners. The relationship has remained stable and constructive, with no signs of tariff conflict.
4. Mature Manufacturing Sectors
Vietnam excels in key sectors that overlap with China:
- Furniture
- Footwear (Vietnam is now one of the world’s largest footwear exporters)
- Apparel and textiles
- Wood products
- Consumer goods
- Electronics and components
5. High Manufacturing Quality
Foreign investment from Korean, Japanese, European, and American companies has elevated quality standards. Many factories in Vietnam now match or exceed the reliability of Chinese suppliers.
6. Increasing Production Capacity
Supply chains in Vietnam have grown rapidly to support global buyers looking to diversify.
7. Risk Diversification
Importers reduce tariff exposure, geopolitical risk, and compliance challenges by shifting 20–50% of production to Vietnam.
Vietnam vs China: Which Is Better for Your Product Category?
Both countries remain manufacturing leaders, but Vietnam holds strong advantages in several key industries.
Read more: Made in China vs Made in Vietnam: Full Product and Sourcing Comparison
Footwear
Vietnam is now one of the world’s top footwear exporters. Skilled craftsmanship, lower labor costs, and stable trade conditions make it ideal for shoes and sneakers.
Furniture
Vietnam is a global furniture powerhouse. Wood furniture, outdoor furniture, and OEM production for global brands are well-developed.
Textiles & Apparel
With strong labor availability and lower costs, Vietnam is ideal for apparel, uniforms, sportswear, and private-label clothing.
Electronics & Components
Major brands have shifted assembly lines to Vietnam. The electronics sector is growing quickly, supported by foreign direct investment.
Consumer Goods
Vietnam produces a wide range of household and consumer products comparable to Chinese offerings.
If your industry is sensitive to tariff costs or highly price-driven, Vietnam typically delivers strong savings and improved supply-chain stability.
How Importers Can Reduce Tariff Costs by Sourcing from Vietnam
Companies are adopting new sourcing strategies to reduce tariff exposure:
1. Dual Sourcing
Producing part of your volume in China and part in Vietnam helps balance risk and cost.
2. Shifting High-Tariff Products First
Products with 20–25% tariffs deliver the fastest cost savings when moved to Vietnam.
3. Comparing Landed Costs
When comparing China vs Vietnam, it’s not just factory prices. Total landed costs often favor Vietnam once tariffs are included.
4. Building Supplier Relationships Early
Many companies are moving quickly to secure capacity in Vietnam. Early engagement ensures better pricing and reliable long-term supply.
What Importers Should Watch for Next: Tariff Trends and Policy Signals
Even though tariffs have been in place for years, the situation continues to evolve. Here’s what importers should monitor:
- Possible tariff extensions or increases in response to geopolitical developments.
- New exemptions that may be temporary or sector-specific.
- Shifts in global manufacturing capacity, especially in electronics, furniture, and footwear.
- Increased enforcement of customs compliance, especially for Chinese-origin materials.
- Greater incentives for production in Southeast Asia.
Businesses that follow these developments closely, and adapt quickly, will have a clear advantage.
How VALO Helps Importers Navigate Tariff-Driven Shifts
VALO Vietnam connects international buyers directly with qualified and verified Vietnamese factories across multiple industries. We make the sourcing process easier, faster, and more transparent by offering:
- Direct factory connections with no middleman fees for buyers
- Verified supplier information
- Access to manufacturers across key industries such as furniture, footwear, apparel, home goods, and consumer products
- Clear communication channels between buyers and suppliers
- Support for companies shifting partial or full production from China to Vietnam
Whether you're exploring Vietnam for the first time or scaling your existing operations, VALO helps you find reliable partners without the hassle.
Your Next Move in a Changing Global Trade Landscape
China–US tariffs continue to shape global sourcing strategies in 2025. For many companies, the costs and uncertainties involved in importing from China have created an urgent need for diversification. Vietnam has emerged as the most practical, cost-efficient, and reliable alternative, offering strong production capability, stable trade relations with the U.S., and freedom from Section 301 tariffs.
Businesses that explore Vietnam now position themselves for long-term stability, better pricing, and more resilient supply chains. If your company is evaluating a shift, VALO Vietnam helps you connect directly with Vietnam’s most reliable factories, making the transition faster and more seamless.
- Call us 24/7: +84 79 928 7929
- Email: alo@valovietnam.com
Frequently Asked Questions (FAQ)
1. Why are China–US tariffs still in place in 2025?
Tariffs were introduced during the trade war and have remained largely unchanged due to ongoing geopolitical tension, concerns over supply-chain dependence, and continued policy reviews. Despite changes in administration over the years, no major rollback has occurred.
2. Which products from China face the highest tariffs?
Products such as electronics, machinery, furniture, footwear, textiles, plastics, and various consumer goods face the highest Section 301 tariff rates. Anti-dumping and countervailing duties can push certain categories far above 25 percent.
3. Are any goods exempt from tariffs?
Yes. Some machinery, components, medical equipment, chemicals, and select electronic parts may qualify for exemptions. However, exemptions are reviewed regularly and may expire without warning.
4. How do tariffs impact the total landed cost for importers?
Tariffs increase the final landed cost by adding 10–25 percent or more to Chinese imports. This affects product pricing, margins, forecasting, and inventory planning.
5. Will tariffs on Chinese goods be removed soon?
There is currently no sign of a full rollback. Policy reviews continue, but most tariffs remain in place, and some categories may face additional scrutiny.
6. How much can I save by moving production to Vietnam?
Savings vary by industry, but bypassing a 25 percent tariff can significantly improve margins. Even when factory prices are similar, the absence of tariffs makes Vietnam a cost-effective alternative.