Textile and garment sector responds to tax challenges
US President Donald Trump has just signed an executive order adjusting reciprocal tariffs on 69 countries and territories, with Viet Nam’s tariff set at 20%, effective from August 7, 2025.

Under the impact of this new US tax policy, enterprises have promptly discussed market developments and introduced measures in response.
Viet Nam falls into the group of countries without favourable tariffs compared to many direct competitors in the US market; therefore, businesses must design solutions to secure jobs and incomes for workers while boosting exports when positive signals emerge.
Flexibility amid narket volatility
Le Tien Truong, Chairman of the Board of Directors of the Viet Nam National Textile and Garment Group (Vinatex), said that immediately after the White House announced the tax adjustment order, enterprises within the system held discussions with US customers to assess market trends and evaluate impacts on production and business. Goods shipped and in transit to the US before 00:01 on August 7 and cleared before 00:01 on October 5 (US time) will still enjoy the old tariff; transhipped goods will face an additional 40% tax along with some regulations yet to be detailed.
In response, enterprises must adjust production to maintain employment and income for workers, manage finances proactively, and remain flexible on pricing to retain orders and customers. At the same time, they need to explore and expand into new markets to boost production and exports amid increasingly fierce competition.
“Competition will be very intense, and the final months of the year will be a highly volatile period for the market. Units must therefore stabilise their workforce and review and upgrade equipment to meet committed orders. Furthermore, the entire system must focus on productivity and product quality, as these are the key factors for retaining customers and being ready when the market recovers,” Truong stressed.
According to Hoang Manh Cam, Chief of the Vinatex Board Office, the US-announced reciprocal tariffs on 1 August show that no major textile-exporting country enjoys favourable rates, with the base set at 10%. Consequently, demand for textiles in the US will decline due to rising prices. Not only garments but also other products risk price increases due to higher tariffs, affecting US consumer spending.
Viet Nam’s tariff of 20% is higher than Turkey (15%), Cambodia and Indonesia (19% each), on par with direct competitor Bangladesh (20%), and lower than India (25%). Meanwhile, several African countries (with very low-cost textile production) enjoy tariffs of 10–15%, far below Viet Nam’s. However, given their limited production capacity and market share, these countries are unlikely to pose a significant threat to Viet Nam’s exports in the immediate future. Nonetheless, there is potential risk of orders shifting from higher-tariff countries. Enterprises must prepare for all scenarios, diversify product lines, markets, and customers to drive exports.
Nguyen Huu Cung, PhD, lecturer at the School of Interdisciplinary Sciences and Arts, Vietnam National University, Hanoi, noted that the US remains Viet Nam’s key export market. However, it is crucial to study and expand into new markets to reduce dependence on a few large destinations. While reciprocal tariffs create certain pressures, they also provide opportunities for businesses to improve adaptability, upgrade national value chains, and transition towards a sustainable growth model.
Strengthening production and business
Amid global uncertainty marked by escalating conflicts, complex tariff policies, and disrupted supply chains, enterprises have flexibly adopted solutions to accelerate exports, aiming to achieve their targets while maintaining jobs and incomes for workers.
Vien Minh Dao, General Director of March 8 Textile Single-Member Limited Liability Company, reported that in the first seven months of the year, the company produced 6,832 tonnes of yarn, reaching 51.7% of its annual plan; earned revenue of 460 billion VND, meeting 50% of the yearly target; with accumulated profit of 800 million VND; and average monthly income of 13.2 million VND per worker.
To achieve these results, the company focused on daily productivity improvements such as optimising output, stabilising quality, enhancing raw material standards, and ensuring continuous production. It also adjusted its market structure by prioritising efficient product lines, analysing costs, and determining profit and loss for each item.
“To complete the annual targets and ensure stable employment and average income for workers, March 8 Textile will continue to enhance production capacity, expand markets and customers. The company is applying technology to review production lines across all stages to stabilise the quality of specialty products. Additionally, we are investing in automation and in-depth improvements to enhance product quality and competitiveness,” Dao affirmed.
Nguyen Thi Mong Hoai, Deputy Director of Hoa Tho Garment Factory (Quang Ngai), added that in recent years, the unit has faced severe difficulties following the COVID-19 pandemic and market fluctuations, which caused sharp declines in customers and performance falling short of expectations. Thanks to various measures to strengthen production and business, the company’s revenue in the past seven months reached 85 billion VND, equal to 59% of the annual plan, with an average monthly income of 9.8 million VND per worker. Current orders last until October, and some customers have placed orders through March 2026.
However, intense competition for labour, market fluctuations, and especially changes in tariff policies continue to pose challenges. To achieve its annual export revenue target of 145 billion VND, the factory will continue investing in modern equipment, cutting costs, and seeking new markets.