Nearshore News: China’s Economy Sends Mixed Signals, U.S. Consumers Want Transparency, Toymakers Court Adults and Nearshoring Emerges as a Strategic Move

In China, retail sales surged while industrial output slowed, revealing uneven momentum amid economic headwinds. Meanwhile, American shoppers are demanding more transparency on how tariffs affect prices, and some brands are finding creative ways to adapt, like toy giants creating collections for adult collectors. In the background, the push toward reshoring and nearshoring remains a strategic move for supply chain resilience.

Nearshore News Summary:

• In May, China's economy exhibited mixed signals as retail sales grew by 6.4% year-on-year (the fastest pace since December 2023) while industrial output slowed to 5.8%, its weakest growth of the year. (FT)
• Reshoring and nearshoring emerge as strategies to build supply chain resilience and reduce dependence on distant production hubs (SDC Executive)
• The fog of trade war is causing confusion about price increases: 61% of Americans said they would like businesses to indicate how much of a purchase price goes toward paying tariffs (WSJ)
• Faced with rising tariffs on Chinese-made toys, major toy companies like Mattel, Hasbro, and Lego are turning to adult collectors (a niche audience less sensitive to price hikes) to drive revenue. (NYT)

China's Retail Sales Jump While Industrial Growth Slows Amid Trade War Turmoil

Published: June 16, 2025
Source: Financial Times

China’s May data reveals mixed economic signals: retail sales rose 6.4%, the fastest pace in over a year, while industrial production slowed to 5.8%, its weakest rate in 2025. The divergence highlights how consumer spending is emerging as a rare bright spot amid the pressures of the U.S.-China trade war, property market weakness, and declining exports. Analysts remain cautious, noting that last week’s trade truce and temporary tariff cuts have not reversed broader economic headwinds.

Key points: 

• Retail Sales Outperform: Retail sales grew 6.4% year-on-year in May — the strongest since December 2023 — driven partly by an early online shopping festival.
• Industrial Output Slows: Industrial production growth eased to 5.8%, down from April’s 6.1%, reflecting weakening export demand and trade tensions.
• U.S. Exports Plunge: China’s exports to the U.S. fell 34% in May, the steepest decline since early in the pandemic, signaling the impact of new tariffs and ongoing trade uncertainty.
• Real Estate Still in Crisis: Property investment dropped 10.7% year-on-year (Jan–May), and new home prices in major cities declined 0.2% in May — a faster pace than April.
• Trade Truce Offers Limited Relief: Although a U.S.-China agreement was reached to lower tariffs, Capital Economics and Goldman Sachs analysts warn that it hasn’t halted China’s broader economic slowdown.

The Risks and Rewards of Re- and Nearshoring

Published: June 15, 2025
Source: SDC Executive

As manufacturers recover from recent global disruptions, reshoring and nearshoring have emerged as strategies to build supply chain resilience and reduce dependence on distant production hubs. However, many companies remain hesitant, with 50% of North American manufacturers reporting no plans to reshore, according to Parsec Automation’s latest survey. 

Key points:

• Two strategic paths: reshoring vs. nearshoring: Nearshoring moves production to nearby, lower-cost countries (e.g. U.S. to Mexico), while reshoring brings it back home. Each offers different trade-offs in cost, proximity, and control.
• Challenges include infrastructure and talent: Many regions may lack the necessary industrial infrastructure or skilled labor, making relocation costly and complex without careful planning.
• Supply chain rebuilds take time: Moving production involves resetting supplier relationships and logistics networks, which can lead to temporary disruption and high upfront costs.
• Reshoring boosts resilience and quality: Proximity reduces exposure to global shocks and improves oversight, helping manufacturers manage risks, ensure compliance, and meet customer expectations faster.
• No one-size-fits-all solution: Companies should assess reshoring or nearshoring based on strategic alignment, cost impact, workforce availability, and supply chain complexity—not trends or pressure.

The Fog of Trade War Is Causing Confusion About Price Increases

Published: June 14, 2025
Source: WSJ

As the latest round of tariffs takes hold, American consumers are struggling to understand whether rising prices are driven by trade policy, inflation, or corporate markup. The constantly shifting nature of tariff enforcement—along with a lack of transparency from many brands—has created what some call the "fog of trade war." 

Key points:

• Tariff Confusion at the Register: Shoppers like Peter Blatt are unsure if products already in stores should be subject to new tariffs, especially as staff update prices manually and inconsistently.
• Inflation vs. Tariffs: Nearly 75% of Americans cite both tariffs and inflation as causes of recent price hikes, showing just how unclear pricing origins have become.
• Corporate Responses Vary Widely: Some brands like Heritage Steel have not yet passed on increased costs, while others like Made In Cookware and Scanovus have added large duties—sometimes unexpectedly.
• Calls for Transparency: 61% of Americans say they want companies to disclose how much of a price goes toward paying tariffs, according to a recent Economist/YouGov poll.
• Business Owners Are Also Uncertain: Even retailers like DiabolikDVD admit they’ve charged tariffs in error and issued blanket store credits because enforcement has been too unpredictable to manage precisely.

Toymakers Team Up With Artists for Tariff-Proof Toys

Published: June 16, 2025
Source: NYT

Faced with rising tariffs on Chinese-made toys, major toy companies like Mattel, Hasbro, and Lego are turning to adult collectors — or "kidults" — to drive revenue. By collaborating with contemporary artists to create high-end, limited-edition toys and collectibles, these brands are reaching a niche audience less sensitive to price hikes and eager to pay premium prices for nostalgic, artful products. 

Key points:

• Toymakers target adult collectors: Companies like Mattel, Hasbro, and Lego are collaborating with artists to sell exclusive toys priced from $350 to $8,000, positioning them as displayable art rather than children’s playthings.
• A response to tariffs and supply chain risks: With ~80% of U.S. toys made in China, companies are preparing for price increases and shortages caused by Trump’s tariffs, which disproportionately affect traditional, mass-market toys.
• Adult-focused lines are booming: While overall toy sales declined, collectibles and franchises like Barbie, Hot Wheels, and Magic: The Gathering are growing — fueled by nostalgic adult fans with disposable income.
• Mattel Creations and Hasbro Secret Lair: These platforms allow for limited-edition artist collabs that blend commercial and fine art. Notable collaborators include Madsaki, Virgil Abloh, and Takashi Murakami.
• Avoiding tariffs with U.S.-made products: Some collectible lines, like Magic cards and bespoke Uno decks, are produced in the U.S., bypassing tariffs entirely while enhancing brand prestige.