Markets have rallied since the April 8th, 2025 low, even as front‑page stories warn of soaring prices and empty shelves.
Markets have rallied since the April 8th, 2025 low, even as front‑page stories warn of soaring prices and empty shelves.
1: A gap between forecasts and reality
Early commentary predicted it would take most of the decade to shift production out of China. Companies are moving far faster:
On yesterday’s earnings call, CEO Tim Cook said most iPhones bound for U.S. shelves this quarter will be produced in India, while iPads and Macs will come from Vietnam an example of why the negotiating pressure today is falling more on Beijing than on Washington.
These moves undercut projections of three‑thousand‑dollar iPhones and ease the near‑term inflation threat that weighed on sentiment earlier in the year.
2: “Time is not China’s friend”
Investor Bill Ackman summed up the dynamic:
“Every U.S. company that sources products in China are in the process of finding alternative suppliers… the longer tariffs last, the more permanent the shift.”
As factories migrate to India, Vietnam, and Mexico, new capital investment makes a return to China unlikely. That reality increases pressure on Beijing even as U.S. consumers keep spending.
Bottom line
Tariffs have not yet dented consumer demand, but they have accelerated a structural rerouting of global manufacturing. Markets appear to be pricing in that shift, which helps explain their resilience despite persistent headline risk. This does not guarantee that everything will turn out fine, future policy moves from Beijing will matter but for now, the pressure seems to rest more heavily on China, and markets have taken notice.
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