Textiles, footwear face new tariff and competitive cost challenges

(Chinhphu.vn) - On the morning of September 9, at the conference on trade promotion with the Vietnamese trade office system abroad in August 2025 chaired by the Minister of Industry and Trade, representatives of the Textile and Apparel Association and the Vietnam Leather, Footwear and Handbag Association shared new challenges and proposed many solutions to overcome difficulties, improve competitiveness and take advantage of opportunities from the international market.

Mr. Truong Van Can, Vice President and General Secretary of the Vietnam Textile and Apparel Association, said that in 8 months, the textile and garment industry's export turnover is estimated to reach 30.8 billion USD, an increase of 7% compared to 2024 - Photo: VGP/Vu Phong

Mr. Truong Van Can, Vice President and General Secretary of the Vietnam Textile and Apparel Association, said that in 8 months, the textile and garment industry's export turnover is estimated to reach 30.8 billion USD, an increase of 7% compared to 2024. Import turnover reached 6.8 billion USD, an increase of 3.2%; trade surplus of 14 billion USD.

According to Mr. Can, one of the major challenges facing the textile and garment industry today comes from the US's reciprocal tax. In fact, as soon as the US announced this tax rate, many businesses and brands coordinated to boost exports as quickly and as much as possible to this market, resulting in an increase of 17% in export turnover to the US in the first 6 months of the year.

With current tariffs of around 20% on Vietnamese goods and transport tariffs of up to 40%, businesses will certainly face many difficulties. Increased costs will reduce profits, affect resources for improving workers’ lives, and limit the ability to invest in digitalization and greening of production.

However, Mr. Can acknowledged that there are reasons not to be too worried. First, the US textile industry is unlikely to return to domestic production. Second, compared to many direct competitors, the tax rate imposed on Vietnam is not the most disadvantageous. Specifically, China is subject to a rate of 30%, India 50%, while Vietnam is at 20%, equivalent to Bangladesh, Cambodia, Pakistan (about 19-20%). Thus, the risk of shifting orders from Vietnam to other countries is not great; the main difficulty lies in the rising costs and the possible decline in consumer demand of the US people when commodity prices increase.

At the conference, Mr. Can proposed the need to diversify export markets. Currently, Vietnam's textile and garment exports to many regions are still low compared to their potential. The EU only accounts for 2.65% of the bloc's textile and garment import turnover; the UK 4.45%; Russia 3.1%; CPTPP 9.6%; ASEAN 4.9%. These markets still have a lot of room to increase their export proportion.

Along with that, diversify the market for importing raw materials. Currently, Vietnam imports from about 30 countries, but the proportion from China is still too large. Taiwan accounts for 7.6%, the United States 7.3%, and South Korea 7.1%. Therefore, it is necessary for the Trade Offices to support in finding new sources of supply to reduce dependence.

According to Mr. Can, it is necessary to develop domestic raw material production. Yarn has been produced in large quantities, but fabric for export garments is still in serious shortage. This is a fundamental problem, so he suggested that the Ministry of Industry and Trade and localities direct and promote investment in this field, and at the same time, through deals, introduce reputable investors with capital and technology potential to Vietnam.

Ms. Phan Thi Thanh Xuan, Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association, said that in the first 8 months of 2025, the leather and footwear industry achieved quite impressive growth, about 10% - Photo: VGP/Vu Phong

Footwear faces cost pressures and new competition

Ms. Phan Thi Thanh Xuan, Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association, said that in the first 8 months of 2025, the leather and footwear industry achieved quite impressive growth of about 10%. The US market is still the main driving force with a growth of 12%.

According to Ms. Xuan, the biggest challenge now is export prices. While domestic production costs are rising, export prices are being forced down. Vietnamese businesses cannot compete with Chinese costs because the infrastructure and supply chain of domestic raw materials are limited. This makes it impossible to accept many orders.

Technology is also a barrier: There are products that customers want to transfer but Vietnamese businesses have not mastered the technology, forcing them to continue production in China. In addition, Indonesia is actively negotiating an FTA with the EU and if successful in late 2026 or early 2027, this will be a big challenge for the Vietnamese footwear industry.

From that reality, Ms. Xuan recommended that regarding import-export policies, although the law has become more open, some decrees have not been amended, causing great difficulties for export production enterprises to proactively source raw materials. Enterprises reported that they could not get tax refunds, forcing them to switch to importing instead of buying and selling raw materials domestically.

In addition, regarding the establishment of a center for raw materials for textiles, footwear and wood, Ms. Xuan said that the associations have agreed to develop a project but have encountered many difficulties in procedures and implementation experience. This is a new model, not only a warehouse but also an integrated market, research and development center, testing and quality assessment services.

"Land is available, but there is a lack of international advice and practical experience. We recommend that the Ministry of Industry and Trade and trade offices, especially in China, support the sharing of experience," Ms. Xuan suggested.

Regarding the opinions of the two associations, Minister of Industry and Trade Nguyen Hong Dien said that from October 2025, the Government assigned the Ministry to annually organize 4 sessions of national and international industrial and trade fairs. This will be a great opportunity for businesses and industry associations to introduce products, exchange technology and seek investment and production cooperation.

Regarding the project to establish a raw material center for the textile, footwear and wood industries, the Minister said that the Vietnam Trade Office in China will connect with the Chinese Ministry of Commerce to propose that China support us in studying this model in practice.

Anh Tho

Source: https://baochinhphu.vn/det-may-da-giay-truoc-thach-thuc-thue-quan-va-chi-phi-canh-tranh-moi-102250909163406026.htm