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China Reportedly Advises Shein Against Shifting Supply Chain

FILE PHOTO: A shopper poses with bags of promotional merchandise as she visits fashion retailer Shein's Christmas bus tour, in Manchester, Britain, December 13, 2024. REUTERS/Temilade Adelaja/File Photo
FILE PHOTO: A shopper poses with bags of promotional merchandise as she visits fashion retailer Shein's Christmas bus tour, in Manchester, Britain, December 13, 2024. REUTERS/Temilade Adelaja/File Photo
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China Reportedly Advises Shein Against Shifting Supply Chain

FILE PHOTO: A shopper poses with bags of promotional merchandise as she visits fashion retailer Shein's Christmas bus tour, in Manchester, Britain, December 13, 2024. REUTERS/Temilade Adelaja/File Photo
FILE PHOTO: A shopper poses with bags of promotional merchandise as she visits fashion retailer Shein's Christmas bus tour, in Manchester, Britain, December 13, 2024. REUTERS/Temilade Adelaja/File Photo

Fast-fashion retailer Shein is facing opposition from the Chinese government over its plans to shift some production out of the country, Bloomberg News reported on Tuesday, citing people familiar with the matter.
China's Ministry of Commerce has reached out to Shein and other companies, advising them against diversifying supply chains by sourcing from other countries, one person familiar with the matter told Bloomberg News.
Bloomberg News said it wasn't immediately clear which other firms were contacted by the commerce ministry.
The requests came in the run-up to US President Donald Trump's announcement on reciprocal tariffs that have sent firms scrambling for alternative ways to avoid additional import levies, the person told Bloomberg News.
Shein did not immediately respond to a Reuters request for comment on the report.
Trump's harsher-than-expected tariffs have roiled markets globally, wiping trillions of dollars in value across assets, and elicited strong rebuke from China and additional tariffs of 34% on all US goods.

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Fashion

Adidas Holds Back on Profit Upgrade Due to Tariff Uncertainty 

The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
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Adidas Holds Back on Profit Upgrade Due to Tariff Uncertainty 

The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)

German sportswear maker Adidas on Tuesday said higher US import tariffs and broader uncertainty around trade were clouding its forecasts and making it difficult to plan.

CEO Bjorn Gulden said the company would have hiked its revenue and profit guidance for 2025 after strong first-quarter results, but tariff uncertainty meant it decided to hold back.

Adidas expects the blanket increase in US tariffs to eventually cause price increases across all its products, but said it was currently impossible to quantify those or to establish the likely impact on US consumer demand, highlighting the paralysis caused by trade uncertainty.

Adidas has already reduced exports of China-made goods to the US to a minimum but is still "somewhat exposed" to much higher US tariffs on Chinese goods, Gulden said, though it is unclear how long those might remain at the current level.

"Given the uncertainty around the negotiations between the US and the different exporting countries, we do not know what the final tariffs will be. Therefore, we cannot make any 'final' decisions on what to do," Gulden said.

Unexpectedly high US tariffs on Southeast Asian countries such as Vietnam and Indonesia, announced at the start of this month, but paused until July, blindsided sportswear brands, which make most of their sneakers and clothing there.

As tariffs raise the cost of doing business, Adidas said it would strive to ensure US retail partners and consumers get product "at the best possible price", adding it would try to compensate for uncertainty in the US by boosting its performance in the rest of the world.

First-quarter sales rose 14% in Europe and 13% in Greater China and were up 26% in Latin America. Sales in North America increased just 3%, which Adidas said was due to the phase-out of its Yeezy sneaker line.

While sticking to its full-year guidance, Adidas said uncertainties "could put negative pressure on this later in the year".