Shein Leases Major Vietnam Warehouse Amid U.S.-China Trade Uncertainty

Fast-fashion giant Shein has secured nearly 15 hectares of industrial land near Ho Chi Minh City for a massive warehouse, two sources told Reuters. This marks Shein’s first major logistics move in Vietnam, a strategic shift to mitigate risks from ongoing U.S.-China trade tensions.

Founded in China, Shein has relied heavily on Chinese suppliers to fuel its global business, known for ultra-cheap items like $5 bike shorts and $18 sundresses. But with rising geopolitical pressures and shifting tariff rules, the company is diversifying operations. The new Vietnamese warehouse—about the size of 26 football fields—will serve as a key logistics hub, storing apparel before export, especially to the U.S. market.

Vietnam offers several advantages: proximity to China, a major port system, and favorable trade terms. While Shein hasn’t confirmed the warehouse lease, the move aligns with its broader diversification strategy. Some Chinese suppliers have already started shifting production to Vietnam, with reports suggesting Shein is exploring sourcing options beyond China, including Turkey and Brazil.

The shift comes as the U.S. tightens rules around the “de minimis” duty-free exemption. Earlier this month, the exemption was temporarily revoked for Chinese imports, exposing Shein’s packages to tariffs as high as 120%. Although a recent U.S.-China deal reduced these rates, experts caution that relying on such exemptions long-term is risky.

Despite investing $1.37 billion into expanding its Chinese operations, including a massive supply chain hub near Guangzhou, Shein appears to be hedging its bets. Industry analysts warn that without diversification, the company risks disruption. Vietnam, for now, remains a competitive alternative, as U.S. tariffs on Vietnamese exports remain relatively lower.

Shein did not respond to Reuters' request for comment.