Key facts
- Vietnam faces higher U.S. tariffs (12.5%) than peers (10%) on apparel exports.
- Vietnam is excluded from a new U.S. textile import mechanism that offers tariff reductions.
- The new tariffs target 60 trading partners over allegations of lax enforcement of forced labor bans.
- Major apparel brands like Nike, Gap, Ralph Lauren, and Under Armour have significant manufacturing bases in Vietnam.
- Vietnam became the largest apparel exporter to the U.S. last year, surpassing China.
Vietnam, the largest exporter of apparel to the United States, is set to face higher U.S. tariffs than its competitors, potentially eroding its competitiveness in the clothing sector. This comes as Vietnam has been excluded from a new U.S. mechanism designed to reduce duties on certain textile imports.
The new tariffs, set to take effect on Friday, will be 12.5% for Vietnam, while countries like Bangladesh, Cambodia, Indonesia, and Malaysia will face 10% duties. These competitors are also beneficiaries of a new "textile mechanism" that could exempt a portion of their apparel exports from additional tariffs, provided they purchase U.S. cotton and textile inputs.
These measures are replacing temporary 10% tariffs imposed by the Trump administration. The U.S. decision impacts major apparel brands such as Nike, Gap, Ralph Lauren, and Under Armour, which have substantial manufacturing operations in Vietnam. Vietnam overtook China last year to become the leading apparel exporter to the U.S. and holds one of the largest trade surpluses with Washington.