What do US$27 billion in exports and a US$11.76 billion trade surplus in the first seven months tell us about the textile and garment industry’s resilience and adaptability? What will drive its growth in the coming period?

The business environment has changed significantly since the beginning of the year. Businesses have faced pressure from new U.S. tariffs, escalating geopolitical conflicts, supply chain disruptions, and rising transportation and raw material costs. Against this backdrop, maintaining export turnover at US$27 billion in the first seven months, up 2.67% year on year, has been a significant effort by the industry.

One notable change in the export structure is the strong growth in raw materials and semi-finished products. In addition to apparel, which reached US$21.1 billion, exports of fibers and textile and garment materials also recorded strong growth. Thanks to effective import controls, the industry maintained a trade surplus of US$11.76 billion, up 4.3%.

To achieve the full-year target of more than US$48 billion, up 5-6% from 2025, businesses need to maintain average monthly exports of around US$4.3-4.5 billion in the remaining months. The annual export target is achievable if businesses continue to proactively monitor markets, maintain orders, and adopt appropriate solutions to respond to fluctuations in international trade.

However, contributing to Vietnam’s target of double-digit GDP growth depends not only on export turnover but also on improving growth quality. VITAS has identified three specific directions for achieving this.

First is restructuring, technological innovation, greater automation, and higher productivity to increase incomes for about 1.86 million workers at enterprises and nearly 1.5 million workers in cooperatives and household businesses related to the textile and garment sector. These workers currently earn an average total income of more than VND10 million per person per month, contributing to an annual wage fund of around US$14 billion, including about US$8.5 billion for workers in industrial enterprises. Higher incomes, combined with measures by sectors and localities to stimulate consumption, will boost household consumption, an important contributor to GDP growth.

Second is to focus on attracting investment in textiles, dyeing, and textile and garment materials through large-scale projects to build domestic supply chains, thereby increasing localization and added value, meeting origin requirements, making use of tariff incentives under free trade agreements (FTAs), and contributing to GDP growth.

Third is to increase exports and reduce imports to expand the trade surplus, while focusing on the domestic market and making a direct contribution to GDP growth.

Amid major changes in international trade, particularly in the U.S. market, how is Vietnam’s textile and garment industry adapting to maintain competitiveness and stable exports?

The U.S. decision to impose a 12.5% tariff on Vietnam under Section 301 of the Trade Act of 1974 concerning forced labor poses a major challenge. Among the 10 largest textile and garment export competitors in the U.S. market, all except China and Turkey are subject to the lower 10% tariff rate. In particular, countries such as Bangladesh, Cambodia, Indonesia, and Malaysia may also receive an additional 0% tariff-rate quota (TRQ) for three years if they increase their use of U.S. cotton and textile materials. Meanwhile, Vietnam was already the largest importer of U.S. cotton, importing 789,000 tons worth more than US$1.3 billion in 2025 and a further 538,000 tons worth nearly US$900 million in the first six months of 2026, but does not receive a TRQ.

A positive development came on July 22, 2026, when Vietnam proactively issued Decree 292/2026/ND-CP, prohibiting the import of goods produced wholly or partly using forced labor and completing the legal framework in this area.

Beyond the U.S. market, continued market expansion and diversification will create more opportunities for textile and garment businesses. Businesses need to proactively study and effectively tap markets and FTAs in which Vietnam participates, while improving their ability to adapt to changes in international trade.

Developing domestic sources of raw materials and textile and garment materials is key to improving the industry’s competitiveness. What should be prioritized to increase localization, raise value across the supply chain, and better meet export market requirements?

The production of raw materials and textile and garment materials remains the biggest bottleneck for Vietnam’s textile and garment industry. Depending on the type, 60-70% of raw materials and materials still need to be imported, while new-generation FTAs such as the EU-Vietnam Free Trade Agreement (EVFTA) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) require strict rules of origin covering two to three production stages or an RVC of at least 40%. In this process, joint ventures between Chinese businesses and strong domestic enterprises should be encouraged, with specific requirements for each stage of technology transfer.

Developing domestic supplies of raw materials and textile and garment materials will help increase localization, added value, and the ability to meet origin requirements. This is also an important direction for the textile and garment industry to strengthen competitiveness and make better use of FTA incentives.

Alongside investment in technology and the production of raw materials and textile and garment materials, the industry also needs to focus on developing high-quality human resources, particularly personnel in specialized areas such as textiles, dyeing, and eco-design. Training workers to meet new technology requirements will be an important factor in improving productivity, product quality, and the industry’s added value.

Businesses should continue to proactively invest in technological innovation, improve productivity, strengthen supply chain linkages, and gradually improve product quality to sustain growth amid continued volatility in international markets.

Thank you very much!