After the US-China tariff deal, will Chinese factories still need Southeast Asia?

AI Summary

Proposed US-China tariff cuts could reduce the incentive for Chinese manufacturers to use Southeast Asian production as a hedge against US duties. The plan would restore preferential treatment for more than 90% of Chinese goods on a US$30 billion list, potentially reshaping supply-chain and trade economics.

For years, Chinese manufacturers have viewed Southeast Asia as a way to reduce exposure to higher US duties on goods made in China. But a new round of tariff cuts proposed by Washington and Beijing could weaken that incentive for some products, potentially changing the economics of the strategy. Under the new US-China Board of Trade, more than 90 per cent of Chinese products on a list of goods worth US$30 billion – mostly everyday consumer items, such as toys and household goods – would return...