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Trump administration has eliminated the de minimis exemption and announced steep new tariffs on China this year. Still, many US retailers continue to source from the Asia’s largest economy.

Retail stocks have been volatile amid this geopolitical uncertainty in 2025, with renowned names like Tapestry and, more recently, Lululemon flagging tariff-related headwinds hurting financials.

Still, a more-than-expected number of retailers are sticking with China because it offers three core strengths that are hard to replicate elsewhere, said Deborah Weinswig, chief executive of Coresight Research, in a recent CNBC interview.

These are: speed, innovation, and quality.

China offers unparalleled speed to retailers

One of the most cited advantages of Chinese sourcing is speed. From design to delivery, Chinese manufacturers operate on compressed timelines that US facilities struggle to match.

Factories in Guangdong or Zhejiang can prototype, produce, and ship new apparel lines in under three weeks, thanks to vertically integrated supply chains and dense industrial clusters.

In contrast, domestic production often involves fragmented networks, longer lead times, and higher labour costs.

Retailers operating on fast fashion cycles or seasonal drops depend on this agility. The US lacks the infrastructure to support rapid iteration at scale, especially for mid-tier and premium brands.

Even with automation, domestic facilities face regulatory hurdles and labor shortages that slow down production. For many US retailers, the speed advantage of sourcing from Beijing isn’t just operational – it’s existential.

China offers unmatched innovation to retailers

Innovation isn’t just about tech – it’s about process. Chinese suppliers have become co-creators, offering design input, material experimentation, and manufacturing techniques that push product boundaries.

Deborah Weinswig emphasized that many US brands rely on China-based partners not just for execution, but for ideation. Whether it’s moisture-wicking fabrics, 3D knitting, or sustainable dyeing methods, Chinese factories often lead the charge.

Replicating this innovation ecosystem in the US is difficult. Domestic manufacturers are typically more transactional, focused on fulfilling specs rather than pushing boundaries.

Moreover, China’s scale allows for rapid testing and iteration across thousands of SKUs. Without that density, US facilities struggle to justify R&D investment.

For retailers chasing differentiation, China remains a vital innovation hub.

China offers unrivaled quality to retailers

While “Made in USA” carries prestige, Chinese factories have spent decades refining their quality control systems.

From stitching precision to material consistency, many Chinese suppliers outperform their global peers.

Many US retailers have noted that shifting production away from China would mean quality degradation, especially in complex apparel categories.

US manufacturers, though capable, face challenges in scaling quality across large volumes.

Skilled labour is harder to find, and training cycles are longer. Moreover, many domestic facilities lack the specialized machinery used in Chinese plants.

For retailers, quality isn’t just about aesthetics – it’s about returns, brand reputation, and customer loyalty.

Until domestic production can match China’s consistency, the sourcing shift will remain more rhetoric than reality.

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