{"id":12849,"date":"2025-04-11T11:17:07","date_gmt":"2025-04-11T04:17:07","guid":{"rendered":"https:\/\/vietnamsourcingexpo.vn\/?p=12849"},"modified":"2025-04-11T14:46:11","modified_gmt":"2025-04-11T07:46:11","slug":"vietnam-textile-industry-turns-challenges-into-opportunities-to-reshape-the-supply-chain","status":"publish","type":"post","link":"https:\/\/vietnamsourcingexpo.vn\/en\/vietnam-textile-industry-turns-challenges-into-opportunities-to-reshape-the-supply-chain\/","title":{"rendered":"Vietnam Textile Industry Turns Challenges into Opportunities to Reshape the Supply Chain."},"content":{"rendered":"

The United States\u2019 recent announcement of a retaliatory tariff of up to 46% on imports from Vietnam has placed unprecedented pressure on the country\u2019s textile and garment industry\u2014one of Vietnam\u2019s key export sectors to the U.S. market.<\/span><\/i><\/p>\n

According to the General Department of Customs, the U.S. has consistently accounted for over 40% of Vietnam\u2019s total textile and garment export turnover in recent years. The newly imposed tariff severely undermines Vietnam\u2019s price competitiveness, especially when compared to regional rivals like Bangladesh, Indonesia, and India.<\/span><\/i><\/p>\n

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In 2024, Vietnam\u2019s total textile and garment export turnover reached USD 16.6 billion, with the U.S. market accounting for a significant share of 38%.<\/span><\/i><\/p>\n

Shrinking Export Space, Rising Costs<\/b><\/h2>\n

Data from the Vietnam Textile and Apparel Association (VITAS) shows that in 2024, Vietnam\u2019s total textile and garment exports reached USD 16.6 billion, with the U.S. market accounting for about 38% of the total. As a result, the U.S. tariff\u2014reaching up to 46%\u2014is creating significant cost burdens and poses a real risk of market share loss.<\/span><\/p>\n

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Many textile and garment enterprises are struggling under the pressure of the retaliatory tariffs imposed by the United States.<\/span><\/i><\/p>\n

Compared to other major textile exporters to the U.S., the tax rate for Vietnam is unusually high: India at 26%, Bangladesh at 37%, and Indonesia at 32%. Vietnam\u2019s share in the U.S. textile and garment import market rose from 12.98% in 2019 to 15.07% in 2024. With the new tariff, this growth momentum is now at risk of slowing or even reversing.<\/span><\/p>\n

The industry\u2019s heavy reliance on imported raw materials and challenges in meeting rules of origin requirements for preferential tariffs under Free Trade Agreements (FTAs) further complicate Vietnam\u2019s supply chain equation under the new tax regime.<\/span><\/p>\n

Policy Support Is Not Enough \u2013 Businesses Must Proactively Adapt<\/b><\/h2>\n

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Deputy Prime Minister H\u1ed3 \u0110\u1ee9c Ph\u1edbc and U.S. Secretary of Commerce Howard Lutnick discussed the tariff policies currently being imposed by the United States on Vietnam.<\/span><\/i><\/p>\n

In response to the growing pressure, Mr. Truong Van Cam, Vice President and General Secretary of VITAS, proposed four key strategies for businesses in the industry:<\/span><\/p>\n

Diversify export markets<\/b><\/h3>\n

Vietnamese textile exporters need to reduce dependency on the U.S. and proactively expand into FTA-partner markets such as the EU, Japan, South Korea, and Canada. This not only mitigates trade risks but also leverages tariff preferences under FTAs.<\/span><\/p>\n

Strengthen supply chain collaboration<\/b><\/h3>\n

Businesses should deepen collaboration with buyers, brands, and raw material suppliers to share risks and maintain long-term partnerships. VITAS also recommends renegotiating contracts to ensure fairer risk-sharing across the value chain.<\/span><\/p>\n

Increase transparency in raw material sourcing<\/b><\/h3>\n

To meet rules of origin requirements, enterprises must invest in traceability systems and transparent sourcing practices to comply with international standards.<\/span><\/p>\n

Proactively recommend supportive policies<\/b><\/h3>\n

VITAS has urged the Government to negotiate with the U.S. on product-specific tax classifications and request a temporary 2\u20133 month suspension of the new tariffs. It also recommends maintaining support measures such as VAT reduction, land rent cuts, corporate tax deferral, and interest rate assistance.<\/span><\/p>\n

Proactive Sourcing Is No Longer Optional<\/b><\/h2>\n

Ms. Nguyen Thi Phuong Thao, CEO of Garment 10 Corporation, noted that the new U.S. tariffs would undoubtedly increase product costs and reduce Vietnam\u2019s competitiveness in the U.S. market. Without timely solutions, the company could face up to a 10% drop in orders, directly impacting production and cash flow.<\/span><\/p>\n

Thanks to early recognition of rising trade barriers, particularly for key export sectors like textiles, Garment 10 proactively implemented a dual strategy to diversify both markets and sourcing:<\/span><\/p>\n