The Trouble With Quitting China

○ The country has specialized machinery and skilled workers difficult to find elsewhere

- David Rocks

When Lanny Smith founded Actively Black Inc. in 2020, he hired factories in China to produce the brand’s athletic wear. But last year, concerned about production delays caused by China’s Covid lockdowns, Smith explored buying elsewhere. He shipped samples to a supply chain agent who’d assured him there were alternatives in Latin America. “He hit me back the next day and said, ‘You’re not going to find anybody who can do this in the Western Hemisphere,’ ” says Smith, 38, a former basketball star at the University of Houston.

For American companies like Actively Black, buying from China has become more challenging in recent years because of increased tariffs, snarled supply chains, factory shutdowns under Beijing’s Covid Zero policy and rising geopolitical tensions that have forced America Inc. to contemplate the fallout from a possible invasion of Taiwan.

Those concerns have led to a surge in pledges by executives to reduce their reliance on Chinese suppliers. But quitting China isn’t easy, and most progress has been concentrated in industries such as semiconductors that US lawmakers consider vital to national security. Producers of lower-tech, lower-margin products such as clothing, shoes, housewares and luggage are finding that few factories outside China have the machinery or the skilled workforce to, for instance, sew what’s known as a six-needle, flat-seam stitch—needed for Actively Black gear like sports bras and shorts because it doesn’t chafe skin.