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Three months into 2025, global trade has maintained a degree of resilience, but supply challenges are mounting as US trade policies remain heavy-handed and unpredictable. As the new wave of sledgehammer-style US tariffs announced in early April sends global supply chains into uncharted waters, QIMA’s quarterly barometer looks back at the state of the sourcing landscape during the first quarter of another unprecedented year.

China’s trade with emerging regions remains strong amid tensions with the West

China’s economy showed resilience in Q1 2025, with growth projections becoming more optimistic in late March. However, the escalating trade tensions with the US are increasingly impacting “the world factory’s” relations with buyers globally.

QIMA’s first-quarter data on inspection and audit demand indicates a notable shift: for the first time since the 2022 Covid era, China’s relative share in the sourcing portfolios of Western buyers has diminished. This suggests that North American and European supply chains are intensifying efforts to reduce dependency on China.

At the same time, emerging economies have maintained a robust appetite for China imports. Businesses in Latin and South America, in particular, drive this demand, fueled by both local consumption and manufacturing geared towards US nearshoring.

US brands seek new agile sourcing partnerships across Asia

Despite tariff pressure, US brands and retailers have not significantly reduced their China sourcing in the first quarter of 2025 (QIMA data on inspection and audit demand shows a flat year-on-year trend). However, they are increasingly diverting additional order volumes to other supplier hubs in Asia, as part of the ongoing long-term shift away from China.

Notably, traditional alternatives to China, such as Vietnam and Bangladesh, have not seen increased interest this quarter, with inspection and audit demand stagnating year-on-year in both. In Vietnam, the anticipation of Trump’s reciprocal tariffs may have contributed to the decreased interest, while Bangladesh’s manufacturing focus on cotton garments may be limiting some buyers’ options.

Instead of these “usual suspects”, US brands and retailers are exploring newer sourcing markets in Southeast Asia: such as Cambodia (+36% YoY), the Philippines (+62%), and particularly Indonesia, where demand for inspections and audits from US businesses has been booming for three consecutive quarters, more than doubling in Q1 2025. Overall, US demand for inspections and audits in Southeast Asia expanded +55% so far in 2025, with the region accounting for over one-quarter of all US sourcing in the first quarter. However, the impact of the latest round of tariffs, with Vietnam and Cambodia among the hardest hit, may alter this trend in the coming months.

Fig. 1. Relative share of sourcing regions in procurement for US- and EU-based buyers

Growing consumer markets and nearshoring projects fuel growth in Latin and South America

Being one of the regions highlighted by analysts as key drivers of trade in 2025, Latin and South America started the year on a strong note, both as an importer and a supplier market, reminding us that global trade is not limited to a China-US or China-EU route.

QIMA data indicates that businesses in Latin and South America actively sourced from China in Q1 2025 (inspection and audit demand up +21% YoY), while also exploring other supplier markets in Asia, such as Vietnam, Bangladesh and India. On the supply side, the region’s manufacturers received healthy order volumes in the first quarter, with inspection and audit demand expanding by +15% year-over-year, fueled by both North American businesses and local buyers.

With nearly 1 in 2 US businesses planning to increase nearshoring volumes this year, Latin and South American importers and manufacturers may continue to see robust activity in the coming months, especially as the tariff pressure on the region is lower compared to many overseas supplier hubs.

Fig. 2: Nearshoring and reshoring plans reported by respondents of the QIMA 2025 Sourcing Survey

Amid uncertainty and mixed consumer sentiment, European buyers keep sourcing close to home

The ongoing trade escalation between the US and China is also impacting the sourcing strategies of global European brands with exposure to the US market, particularly in the fashion sector. This ripple effect, combined with mixed consumer confidence, has led EU-based businesses to approach China sourcing cautiously Q1 2025. QIMA data suggests that these businesses are relying on existing inventories and engage in limited restocking, primarily close to home.

Despite scaling back overseas procurement due to softening demand, European brands and retailers sustained their sourcing partnerships within nearshoring and home regions. Demand for inspections and audits expanded in the EU’s well-established supplier hubs around the Mediterranean, including Morocco (+45% YoY), Tunisia (+32% YoY) and Egypt (+66% YoY), and almost doubled in continental Europe. This shift has brought the relative share of nearshoring and reshoring in European sourcing portfolios to an all-time high in Q1 2025

Fig. 3: Relative share of overseas vs. home regions in EU sourcing

Non-transparent supply chains compromise buyers’ ability to navigate turbulent trade landscape

In QIMA’s latest survey of 600+ businesses, only 13% of respondents globally reported having full visibility of their sourcing networks, including raw material suppliers. In certain industries, such as electronics, this figure was even lower. In addition to being linked to heightened human rights and environmental risks, this alarming lack of supply chain transparency makes it more difficult for businesses to make timely and informed sourcing decisions – an increasingly crucial ability in the volatile trade landscape of 2025.

Fig. 4: Self-reported state of supply chain visibility, 2025