60M sock gap: How Jasan’s $26.6M exit hits Walmart’s supply chain

Retail executives have long relied on 'China+1' strategies to keep shelves stocked, but the Jasan case shows that even the backup isn't safe. When a major supplier of socks to Walmart cancels a factory overnight, the industry must confront that tariff hedging is no guarantee of stable supply. The 60-million-pair shortfall could ripple into pricing and availability just as consumer spending holds steady.

In a dramatic reversal that encapsulates the precarious nature of tariff-avoidance strategies, Chinese textile exporter Jasan Group has abruptly abandoned a planned US$26.6 million sock factory in Vietnam—only five months after announcing the project. The pullback, disclosed in a Shanghai Stock Exchange filing in February 2026, marks a stunning about-face for a company that had aggressively pivoted to Vietnam in 2017 as a shield against Trump-era trade barriers. Originally, the move to Hung Yen province allowed Jasan to continue supplying US retail giants like Walmart without bearing the punitive tariffs levied on directly Chinese-made goods. For nearly a decade, that strategy paid off handsomely, insulating Jasan from the worst of the US-China trade war while its domestic peers struggled. Now, however, the calculus has shifted radically.

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Jasan’s US$26.6 million write-down in planned investment, while not ruinous for a large textile group, signals a loss of confidence that will reverberate through the supply chain.

The Thanh Hoa project, announced in September 2025, was slated to produce 60 million pairs of socks each year exclusively for the US market. Its cancellation was blamed on delayed land acquisition and, crucially, “uncertainties in operation and export prospects.” This language hints at a broader strategic recalibration. In recent months, US-China relations have shown signs of thawing, but that warming has been met with resistance in both Washington and the US Congress, while separate trade probes and anti-circumvention measures have begun targeting Chinese goods rerouted through third countries like Vietnam. For Jasan, staying in Vietnam suddenly looked less like a safe haven and more like a trap.

The company’s retreat is far from an isolated incident. After Trump launched his first trade war in 2018, a wave of Chinese manufacturers flooded into Vietnam, Cambodia, and other Southeast Asian nations to sidestep tariffs. Vietnam, with its low labor costs and proximity to China’s supply chains, became the poster child for this “China+1” strategy. But over time, the loophole has narrowed. The US has stepped up country-of-origin investigations, threatening to apply tariffs to goods that merely undergo minor processing in Vietnam. Vietnam itself, wary of becoming a conduit for Chinese transshipment, has tightened its own rules-of-origin requirements, adding layers of complexity for companies like Jasan.

The financial toll is immediate. Jasan’s US$26.6 million write-down in planned investment, while not ruinous for a large textile group, signals a loss of confidence that will reverberate through the supply chain. For Walmart, which has historically sourced towels and socks from Jasan, the disruption means scrambling to fill a massive gap—60 million socks annually—just as peak retail seasons approach. Retailers now face a dual challenge: rising sourcing costs and the potential for stockouts in basic apparel categories. This comes at a time when consumer demand for low-priced essentials remains strong, putting margin pressure on big-box retailers who have little room to raise prices without alienating shoppers.