The sourcing sector (finding and managing supply chains) is significantly impacted by the U.S.-China trade war, particularly due to tariffs, rare earth export restrictions, and global supply chain restructuring. Mihoshido provides the latest updates, focusing on the effects on sourcing, shifting trends, opportunities, and risks as of October 14, 2025. If the U.S. imposes 100% tariffs starting November 11, sourcing costs from China could rise by 30-40%, accelerating the shift to Vietnam but straining port infrastructure (Cái Mép-Thị Vải is 15% overloaded).
1. Impact of the Trade War on SourcingRare Earth Restrictions from China
China, controlling 80% of the global rare earth supply, imposed export controls on five rare earth elements and refining technology starting October 9, 2025. This directly affects sourcing for high-tech components (EV batteries, AI chips, defense equipment) in the U.S. and allied countries. U.S. companies like Apple, Tesla, and Nvidia are forced to seek alternative supplies from Canada, Australia, or Vietnam, where rare earth mining is limited.
Impact on sourcing: Rare earth costs have risen 20-25% since April 2025, prompting companies to explore new sources or alternative technologies (e.g., rare earth-free batteries).Tariffs Disrupting Supply ChainsU.S. tariffs on Chinese goods (averaging 57.6% as of October 14, 2025, potentially 100% from November 11) and a $50/ton port fee have increased import costs. China retaliated with 32.6% tariffs on U.S. goods (agriculture, automobiles).
This has pushed multinational companies like Walmart, Amazon, and Foxconn to consider redirecting sourcing to Vietnam, India, and Mexico.Impact on sourcing: Companies must renegotiate supply contracts, extending sourcing timelines (3-6 months). According to VnExpress, 70% of U.S. textile and electronics firms in China are exploring relocation to Southeast Asia, but logistics costs have risen 10-15% due to port congestion.
2. Sourcing Shift TrendsShift to Southeast Asia and Vietnam
Vietnam has emerged as a top sourcing destination due to free trade agreements (FTAs) with the EU, U.S., and CPTPP, along with low labor costs ($2-3/hour compared to $5-7/hour in China). Industries like textiles, footwear, and electronics (Samsung, LG) have increased sourcing from Vietnam, with exports to the U.S. reaching $112 billion in 2025 (up 27% from 2024).
Examples:Samsung is expanding its Thái Nguyên plant, aiming to produce 30% of its semiconductor components in Vietnam by 2026. Intel is increasing investment in its Ho Chi Minh City plant, focusing on AI chips.
Vietnamese media highlights job creation opportunities (500,000 new manufacturing jobs), but VCCI warns of risks from reliance on Chinese raw materials (70% of Vietnam’s electronic components are imported from China).High-Tech SourcingThe U.S. is promoting “friend-shoring” (sourcing from allies like Japan, South Korea, and Taiwan) to secure supply chains. Taiwan (TSMC) and South Korea (Samsung) account for 60% of global chip supply, but capacity shortages make Vietnam and India viable alternatives.
Impact on sourcing: Companies must invest in quality assurance (QA/QC) and workforce training in new markets, increasing initial costs by 15-20%.Localized Sourcing in ChinaChina is pursuing self-reliance through its “dual circulation” policy, reducing dependence on the U.S. Companies like Huawei and BYD have increased domestic supplier investments by 30% since 2024.
3. Opportunities and Risks for Vietnam in SourcingOpportunities
Surging FDI: Vietnam attracted $36 billion in FDI in the first nine months of 2025, mainly from the U.S., Japan, and South Korea, driven by supply chain shifts. Benefiting industries include electronics (Samsung, LG), textiles (Nike, Adidas), and auto components (Hyundai).
Strategic Position: Vietnam’s “new-generation FTAs” and proximity to China make it a key sourcing hub. VCCI notes that 60% of U.S. companies in China view Vietnam as the top destination.
Example: Apple’s AirPods factory in Bắc Ninh is expected to meet 40% of global demand by 2026.
RisksDependence on Chinese Raw Materials: 70% of raw materials (rare earths, plastics, components) are still imported from China, vulnerable to Beijing’s export controls.
Skilled Labor Shortage: Vietnam lacks 150,000 high-tech workers to meet chip and AI production demands (Thanh Niên).
Rising Costs: Tariff spillovers have increased raw material prices by 10-15%; logistics from Vietnam to the U.S. takes 25-45 days, slower than China’s 15-20 days.
4. Strategies for Effective Sourcing
Diversify Supply Sources: Companies should build supplier portfolios across countries (Vietnam, India, Mexico) to mitigate tariff and disruption risks. For example, Nike has shifted 50% of its footwear production from China to Vietnam and Indonesia.
Invest in Technology: Use AI and blockchain to optimize supply chain management, reducing sourcing verification costs by 20% (McKinsey).
Local Partnerships: In Vietnam, collaborate with associations (VCCI, Vinatex) to leverage tax incentives and workforce training.
Monitor Policies: Track U.S. (https://ustr.gov) and Chinese (MOFCOM) tariff lists to adjust sourcing strategies promptly.
5. Short-Term OutlookPositive:
If U.S.-China talks at APEC (November 2025) succeed, tariffs could drop to 20-25%, boosting Vietnam’s component exports to both markets.
Negative: If 100% U.S. tariffs are imposed from November 11, sourcing costs from China will rise 30-40%, accelerating the shift to Vietnam but straining port infrastructure (Cái Mép-Thị Vải is 15% overloaded).
Overall, sourcing is rapidly shifting to countries like Vietnam, but companies must remain flexible and invest long-term to capitalize on opportunities.
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