Shein scales back Vietnam warehouse amid U.S. trade policy shift
Shein is cutting its Vietnam warehouse space and laying off staff after U.S. duty changes eroded the benefits of its Vietnam expansion.
Around a year ago Shein signed a lease for 15 hectares of warehouse space near Ho Chi Minh City, aiming to make Vietnam a major export hub. Following the U.S. termination of the de-minimis duty-free exemption and the imposition of high tariffs, the cost edge of Vietnamese production narrowed and finding low-wage labor proved difficult. The firm now uses roughly one-third of the planned area, with the lease reduced to 6 hectares and large-scale layoffs starting in April.
One outlet visit in late July found only a handful of workers and few trucks, while nearby warehouses remained active. Shein is shifting back to its Chinese base, pledging over 10 billion yuan for a smart supply-chain in Guangdong and targeting a Hong Kong IPO. Suppliers report stagnant or modest order growth, with many turning to platforms like Temu or Amazon, underscoring the company's reliance on Chinese suppliers and volatile trade rules.
Why it matters
The pullback shows how U.S. trade policy can quickly reshape global supply chains and affect employment in emerging markets.
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