The Vietnamese textile and garment industry is facing significant pressure.
The US decision to impose retaliatory tariffs of up to 46% on Vietnam will have a significant impact on the domestic textile and garment industry. This is a very high tariff, seriously affecting the competitiveness, ability to attract investment, and development resources of domestic textile and garment businesses.
At a conference chaired by Prime Minister Pham Minh Chinh on the afternoon of April 7th, Mr. Truong Van Cam – Vice President of the Vietnam Textile and Garment Association (Vitas) – emphasized that this tax rate will cause Vietnamese textile and garment businesses to lose their competitive advantage compared to many other countries.
While Vietnam faces a 46% tariff, competitors like China face only 34%, India 26%, Bangladesh 37%, Indonesia 32%, Mexico 25%, Pakistan 29%, and Türkiye and Honduras only 10%.
In this challenging context, Mr. Cam believes that businesses need to remain calm, proactively update information, cooperate with partners and buyers to share risks and seek solutions.
In addition, businesses should quickly expand their export markets to promising regions such as Islamic (Halal) countries, South America, and countries that have signed FTAs with Vietnam.
Digital transformation, the application of innovation, and the enhancement of internal capabilities are considered crucial strategies for businesses to respond to market fluctuations.
Mr. Cam also suggested that Vietnamese representative agencies abroad actively support businesses in connecting with trading partners, providing market information, and understanding the needs and cooperation opportunities of host countries.
To support businesses in overcoming this difficult period, Vitas representatives suggested that the Government should expedite negotiations on an FTA between ASEAN and Canada or open up a bilateral path with an FTA between Vietnam and Canada.
The goal is to adjust the rules of origin to only two stages, which is more in line with the cooperation capacity of both sides, instead of the three stages stipulated in the CPTPP.
In addition, the government is also proposed to consider issuing timely support policies such as reducing taxes, fees, and loan interest rates, freezing debt, extending debt repayment periods, maintaining debt classifications, and reducing mandatory contributions.
According to Vitas data, in 2024, Vietnam's textile and garment exports reached $43.6 billion, of which the US market alone accounted for $16.6 billion – equivalent to 38% of the industry's total export turnover and 15% of the US's total textile and garment imports.
In the same year, Vietnam imported textiles and garments from the US worth approximately $1.2 billion, accounting for 4.8% of the industry's total import value.