- From JanJul 2025, the US imported about US$9.5bn of apparel from Vietnam (+17.5% YoY) versus US$6.9bn from China (-21%), making Vietnam the top supplier for the first time in the period.
- Vietnams share of US apparel imports rose to ~20.6% through July 2025, surpassing Chinas ~15% amid tariff-driven sourcing shifts.
- A July 2025 USVietnam deal set a 20% tariff on Vietnamese apparel and a 40% tariff on goods deemed transshipped from China to tighten origin enforcement.
- Vietnam is benefiting from China diversification and strong textile FDI, but remains constrained by reliance on imported inputs (often from China) and rising compliance, traceability, and rules-of-origin risks.
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The apparel sourcing landscape is undergoing a tangible shift: for the first time, Vietnam has overtaken China as the largest supplier of apparel to the US over the Jan-Jul 2025 window. The US Office of Textiles and Apparel data reveals US imports from Vietnam reached nearly US$9.5 billion—up 17.5 % from Jan-Jul 2024—while China’s exports fell to US$6.9 billion, down about 21 % in the same span.
This realignment has been driven by several policy levers. U.S. “reciprocal” tariffs imposed in 2025 hit Vietnamese exports at 20 % from August 7, after earlier facing higher rates; China-originating apparel faced even steeper duties (averaging 57.6 %), creating strong incentives for brands to shift orders. Simultaneously, a clause in the U.S.-Vietnam trade deal specifically targets transshipment—goods routed through Vietnam with China content—imposing a 40 % tariff on those to shore up rules of origin enforcement.
Vietnam’s competitive advantages—relatively low labour costs, upgraded U.S. connectivity, active greenfield foreign direct investment—have cumulatively amplified its role. Since 2018, Vietnam has attracted 65 textiles manufacturing FDI projects worth over US$4.6 billion. However, many of these are operated by Chinese firms, and a large share of Vietnam’s inputs—fabric, yarn, accessories—is still imported from China. The domestic value-added and ability to prove origin are therefore key structural issues.
Looking ahead, strategic implications are multifold: Brands and retailers may increasingly view Vietnam and other Southeast Asian nations (Bangladesh, India etc.) as risk management buffers; nations like Vietnam must invest in localization (fabric/textile upstream), compliance and supply-chain transparency to maintain trade preferences; and US trade policy—particularly around tariffs, origin, and transshipment—will remain a master variable, capable of reshaping the competitive landscape yet again.
Open questions include how rigorously the U.S. pursues enforcement of transshipment and origin rules, whether Vietnam can scale up upstream textile production to reduce dependency on China, and how sustainability, labour practices, and supply-chain traceability will factor into US sourcing decisions over the mid-term (to 2027–2028).
Supporting Notes
- US apparel imports from Vietnam (Jan-Jul 2025) totalled nearly US$9.5 billion, a 17.5 % increase over the same period in 2024.
- US apparel imports from China during the same period fell by 21 %, amounting to about US$6.9 billion.
- Vietnam accounted for 20.6 % of US apparel imports Jan-Jul 2025; China’s share dropped to 15 %, down sharply from a peak of about 40 % in 2010.
- In the US-Vietnam trade deal signed July 2, 2025, a 20 % tariff was set for Vietnamese apparel; goods deemed transshipped from China will face a 40 % tariff.
- Since 2018, Vietnam has drawn 65 greenfield FDI projects in textile manufacturing worth over US$4.6 billion—more than any other country.
- Data from Vizion TradeView shows bookings of 20-foot containers of knitted apparel from Vietnam to the US surged to a record high of 9,027 in the week ending September 28, 2025.
- Mickaël Driol of Mekong Partners notes significant capacity has merely relocated from China to Vietnam, not been built anew.
- Vietnam’s localization rate for textile supporting industries (fabric production, dyeing etc.) is expected to reach about 45-50 % in 2025.
- Survey of 25 US fashion brands (April-June 2025): over 80 % plan to further reduce apparel sourcing from China by 2027.