Amid renewed tensions between the US and China, many international companies are again reviewing their footprint in Asia.
To understand how the current tariff environment is affecting human resources decisions FES Partners recently conducted a flash survey among international firms operating in China, the majority of them European manufacturing companies with 1,000–5,000 employees.
What We Found
Contrary to expectations, most companies are not shifting headcount out of China:
- 63% said their China headcount plans remain unchanged despite the tariffs.
- Among European manufacturing companies, 18% are planning to increase headcount in China by up to 25%, while 18% are planning to reduce it
- Only 1 in 10 companies reported plans to relocate roles out of China to Southeast Asia and other destinations.
These findings challenge a common narrative that we’re seeing widespread relocation from China to Southeast Asia. While diversification and risk management are certainly on the agenda, actual headcount movement—based on this snapshot—is limited.
This aligns with a recent flash survey by the European Union Chamber of Commerce in China, which found that while business confidence is under pressure, most companies are sticking with their “in China for China” strategy. The direct HR impacts of the tariff war, for now, appear contained.
But There’s a Bigger Picture
What’s clear is that uncertainty is the real disruptor. Companies may not be leaving, but they are preparing for potential shifts. In our conversations with clients, we’re seeing more organizations build up operations and leadership capabilities in Southeast Asia as a way to hedge against future disruptions—not by reducing their China presence, but by growing their regional options.
“In the search work we’re doing, we’re seeing these trends play out,” says Thaddaeus Mueller, Managing Partner at FES Partners. “We’re currently supporting a large power tools company on their leadership recruiting for Southeast Asia. In line with our survey findings, it’s not a shift for them but rather an addition to their China footprint, which may remain as strong as ever.”
Headcount Plans in China: Response To Tariffs From International Companies
How We Can Help You
At FES Partners, we support companies that are hiring in Southeast Asia, growing in China, or doing both. Whether you need to identify experienced leadership in a new market or want to understand the HR implications of shifting part of your footprint, we offer executive search and HR advisory to help you move forward with clarity and confidence.