Vietnam’s textile and garment industry is closing 2025 on a strong footing, with exports projected at USD 46 billion, up 5.6% year-on-year, according to Vietnam Textile and Apparel Association (VITAS). The sector’s estimated USD 21 billion trade surplus underlines its macroeconomic importance, while a 52% localisation rate signals tangible progress toward supply-chain autonomy.
What’s driving the rebound
- Market reach: Exports now span 138 markets. The United States remains dominant, exceeding USD 18 billion in 2025 (+~10% YoY).
- Product mix: Garments continue to anchor performance, contributing over USD 38 billion.
- Enterprise resilience: Firms adapted through COVID-era shocks, geopolitics, and trade barriers—helping Vietnam retain its top-three global exporter status.
2026: headwinds intensify
- Demand growth slows to ~3% globally (vs. faster growth in 2025).
- Policy pressure: Ongoing U.S. tariff measures dampen consumer demand.
- Competition: Price undercutting from China; tougher EU/Japan/Korea markets.
- Cost & compliance: Higher raw-material/logistics costs, shorter lead times, stricter traceability, thinner processing margins.
Strategic takeaway
Vietnam enters 2026 from a position of strength—stable production, skilled labor, widening localisation, and accelerating sustainability and digitalisation. While low-end cost advantages are narrowing, the sector’s resilience and move up the value chain (FOB/ODM, compliance, speed) should preserve Vietnam’s central role in global apparel supply chains, albeit with tighter margins and sharper competition.
