Why It’s Time to Move Beyond China — And How We Can Help

With the U.S. and China now deep into a new phase of trade confrontation, the global business environment has entered yet another period of adjustment. In April 2025, the U.S. imposed tariffs of up to 125% on a broad range of Chinese imports, a move matched quickly by China’s announcement of 84% retaliatory tariffs on U.S. goods. For many U.S. businesses, these developments represent not only rising costs but also growing uncertainty about the future of their supply chains.

Although China has been central to global manufacturing for more than two decades, it is increasingly clear that U.S. companies — particularly in consumer goods, electronics, automotive, and machinery — need to explore alternative sourcing strategies. These aren’t decisions driven by political ideology, but by economic pragmatism and long-term risk management.

Why It Makes Sense to Move Now

The case for diversification isn’t new, but the pressure to act is intensifying. For years, many companies tolerated the growing complexities of doing business in China due to cost advantages and infrastructure reliability. But the balance has shifted.

First, tariffs are becoming the new norm, not the exception. With bipartisan support in Washington for “decoupling,” many of these trade measures are unlikely to be reversed in the near term. What began as a trade dispute is evolving into a long-term strategic rivalry, and businesses are caught in the middle.

Second, political and regulatory risks in China are more pronounced than ever. Intellectual property concerns, sudden policy shifts, labor issues, and the growing possibility of U.S. sanctions or restrictions in strategic sectors all add layers of uncertainty that few companies can afford to ignore. For some, the risk is not just cost—it’s continuity.

Third, China itself is changing. The government’s push toward self-reliance, internal consumption, and tech nationalism has made the environment less accommodating to foreign firms. Labor costs are rising, regulatory enforcement is tightening, and some industries are being restructured with little notice.

On the other hand, the global landscape has evolved. Manufacturing hubs in Southeast Asia, South Asia, and Latin America have matured considerably. Countries like Vietnam, India, Indonesia, and Mexico now offer competitive labor costs, improving infrastructure, and in many cases, friendlier trade relationships with the U.S. These locations may not offer the same scale or specialization as China — yet — but they are increasingly capable of meeting demand with reasonable quality and flexibility.

What Businesses Should Be Thinking About

Diversifying sourcing doesn’t mean abandoning China entirely. For many industries, a complete withdrawal is neither realistic nor necessary. However, building resilience through a multi-country strategy is becoming a best practice. Companies are now asking:

• Where are the risks in my current supply chain?

• Which suppliers are most exposed to tariff increases?

• What are the hidden costs of staying in China versus relocating part of production?

• What capacity exists in alternative countries, and how long would it take to transition?

These are complex questions, and there’s no one-size-fits-all answer. But delaying action until the next round of tariffs or restrictions is announced could leave companies scrambling. The time to evaluate options is now—before reactive decisions become necessary.

What we are witnessing isn’t just a temporary policy shift. It’s a structural change in the global trade environment. As the U.S. and China move further apart economically and politically, businesses need to prepare for a future where agility, resilience, and diversification are more important than ever.

Diversifying beyond China doesn’t mean turning your back on global efficiency. It means building smarter, more adaptable supply chains that can withstand shocks and keep your business moving. Whether you’re just beginning to assess your risk exposure or already searching for new partners in Asia or the Americas, now is the time for clear-eyed, strategic thinking.

The companies that take steps today will be in a far stronger position — no matter what tomorrow brings. Artisan Business Group stands ready to guide American companies through this transformation. With decades of experience in cross-border investment and international risk management, our team is uniquely positioned to help clients turn today’s geopolitical challenges into long-term growth opportunities.

If your company is ready to explore a world beyond China, contact us today to schedule a consultation.