U.S. importers shifting away from China

April 11, 2012

Importers who sell to major American retailers and distributors report that they have or have plans to move a significant portion of their manufacturing outside of China due to the rising costs for raw materials and logistics.

According to the Capital Business Credit's (CBC) Global Retail Manufacturers and Importers Survey, another factor pushing these companies out of China is the difficulty with which China-based factories have in obtaining financing for projects.

A total of 50 percent of U.S.-based importers have moved some of their manufacturing outside of China and 34.2 percent are preparing to move out off of the Asian continent.

"While China will continue to be the dominant player when it comes to the manufacturing of goods sold in the U.S. there is an interesting shift that is occurring," said Andrew Tananbaum, executive chairman of Capital Business Credit. "The lending environment combined with a number of other factors including cost of labor, raw materials and logistics have made manufacturing in other countries – most importantly the U.S. – more attractive. As the American economy continues to recover, and retail sales continue to improve, the manufacturer/importer relationship will be critical in ensuring that enough goods are made and shipped to keep store shelves stocked."

The top two countries that companies said they were moving operations to were Vietnam and the U.S., with 33.3 percent and 27.8 percent of firms saying they would choose these nations, respectively.

This move out of China shows the trend of outsourcing work could be slowing, and this coupled with a resurgence of certain sectors within American manufacturing may be signs that the industry is becoming more stable in the U.S.

The Cleveland Banner reported that U.S. Secretary of Commerce John Bryson recently spoke to the success of American manufacturers at a speech at the opening of a new Whirlpool manufacturing  facility. He noted the sector was making a comeback and business strategy for many companies favored a shift of operations to the U.S.

"They see our R&D, our supply chains, the quality of our products and our talented workforce. There is simply no comparison. American competitiveness and American innovation are full speed ahead," said the White House Cabinet member.