Exports up 7.7% in 2025, but dependency on imports, logistics costs, and U.S. tariffs weigh on momentum
Vietnam’s textile and garment industry is regaining strength after years of stagnation, recording USD 34.75 billion in exports in the first nine months of 2025 — a 7.7% year-on-year increase. The recovery underscores Vietnam’s growing global position, now ranked third worldwide in textile exports.
However, the comeback masks deep structural vulnerabilities. The sector still relies heavily on imports, with USD 16 billion in raw-material imports — including USD 11 billion in fabric — leaving producers exposed to supply shocks and origin-rule tightening.
Vietnamese firms are moving beyond contract manufacturing into higher-value, design-driven exports. Emerging markets, particularly in the Middle East and Africa, are offering new opportunities: exports to Islamic countries exceeded USD 1 billion in 2024 and hit USD 700 million by mid-2025.
Yet rising costs threaten competitiveness. Production costs in Vietnam are 40–45% higher than in Indonesia or Malaysia, despite greater labour productivity. Logistics expenses have surged, and firms struggle to recruit drivers even at USD 1,300–1,500 monthly wages.
Meanwhile, a 20% U.S. reciprocal tax on Vietnamese apparel — down from an initial 40% proposal — is eroding profit margins and cooling new orders. Buyers are demanding Vietnamese exporters absorb part of the tariff, while U.S. authorities warn of penalties for unclear origin documentation.
The lack of domestic fibre, dye, and chemical production further undermines resilience. Industry leaders urge accelerated localisation, traceability, and credit access tailored to modern export contracts.
As Vinatex CEO Cao Huu Hieu notes, Vietnam’s next leap will depend on green transformation, automation, and brand creation — shifting from volume-based growth to a sustainable, design-led textile ecosystem.
