Driving factors helping textiles maintain export momentum
Mr. Hoang Manh Cam - Chief of Board of Directors' Office of Vietnam Textile and Garment Group, informed that in the first nine months of 2026, textile and garment industry achieved approximately US$37.3 billion in export turnover, an increase of about 3% compared to the same period.
"This result shows ability of businesses to maintain orders in context of a volatile global market, especially continuous changes in US tariff policies - main consumer market for Vietnamese textiles and garments", Mr. Hoang Manh Cam commented.
One factor supporting export is the US application of a 10% tariff under Section 122 of Trade Act of 1974 to many exporting countries, including Vietnam, from February 24th to July 23rd, 2026. This similar tariff level for about five months helps Vietnamese textiles maintain competitiveness, creating favorable conditions for businesses to boost export.
In addition, the US's reciprocal tariff refunds to importers contribute to improving financial capacity of partners. Although refunds are not directly transferred to Vietnamese businesses, this money helps US importers have more resources to continue placing orders.
Fear of changing tariffs also led many importers to expedite orders before July 24th – date the Section 122 tariff expires. This is a significant boost to exports during this period.
In Chinese market, strong increase in demand for imported yarn creates further opportunities for Vietnamese businesses. Meanwhile, relatively low raw material prices in the first quarter of 2026 helped some businesses proactively import cotton and yarn before prices increased due to conflicts in the Middle East. Factors supporting consumer spending in the US are also expected to contribute to improved demand for garments.
Mr. Hoang Manh Cam also provided information that a survey by Fashion Association of America among major buyers showed that about 60% of participating businesses are sourcing or placing more than 10% of their orders from Vietnam, a higher percentage than China and Bangladesh. This reflects level of trust partners have in the supply capacity of Vietnamese businesses.
2027: Many pressures from the domestic market and costs
Outlook for textile and garment exports in the last months of 2026 and 2027 will depend on purchasing power in major markets, trade policies and ability to control production costs.
According to international forecasts cited by Mr. Hoang Manh Cam at conference, global merchandise trade growth in 2026 is estimated at around 4.1%, but a significant portion will come from computers, chips and artificial intelligence products, rather than basic consumer goods such as clothing and footwear.
Notably, merchandise imports in North America are expected to increase by about 2.7% in 2027, while Europe's is projected to increase by 1.4%, both figures revised downwards from previous forecasts. For textiles, this signals that room for order growth may be limited, even if global economy continues to grow.
Risks also arise from conflicts in the Middle East and bottlenecks in shipping. US Energy Security Agency forecasts an average Brent crude oil price of $84 per barrel in 2027, significantly higher than previous forecasts. Rising energy prices, diverted shipping routes, or risk of transportation disruptions can simultaneously drive up logistics costs and extend delivery times. For textile and garment businesses, this not only affects input costs but also increases risk of not meeting order deadlines.
In particular, tariffs and competition can alter order flows. According to Dr. Hoang Manh Cam's analysis, tariff applied to Vietnamese goods in the US is currently 12.5%, higher than the 10% of some competitors such as Bangladesh, Cambodia, India, Indonesia and Malaysia.
Competitive pressure also comes from integration process of competitors. India implemented a free trade agreement (FTA) with UK on July 15th and is expected to implement an FTA with EU in the first half of 2027. If tariff reduction commitments make it more favorable for Indian textiles and garments, Vietnamese businesses will have to compete more fiercely in terms of price and market access.
Meanwhile, overcapacity in China could lead to a continued influx of cheap goods into international markets, putting pressure on prices and market share for Vietnamese businesses. Increased competition could also prompt importing economies to adopt further protectionist measures.
Besides external factors, textile and garment businesses also face risk of increased domestic costs in 2027, including wages, interest rates and electricity prices.
Proposal to increase regional minimum wage by approximately 7.8% from January 1, 2027, is still awaiting approval. If approved, labor costs for businesses will increase further. For labor-intensive industries like textiles and garments, challenge is not only to pay higher wages but also to maintain sufficient productivity to ensure competitive pricing for export orders.
Capital pressure is also noteworthy, as lending interest rates have increased compared to the same period last year, while demand for capital for key projects and infrastructure projects is projected to remain high. Competition for capital and labor across sectors may make it more difficult for textile and garment businesses to access credit, recruit, and retain workers.
In addition, difficulties in electricity supply during 2027-2030 period, along with increased electricity demand from data centers, semiconductor manufacturing, artificial intelligence and electrified transportation, could put pressure on supply. Unpredictable upward trends in imported fuel prices could impact business operating costs.
Export results for the first nine months of 2026 show that Vietnam's textile and garment industry has maintained its competitiveness amidst market fluctuations. However, temporary supporting factors are unlikely to fully replicate in 2027. As purchasing power in major markets slows down, tariff differences and production costs continue to exert pressure, retaining orders will depend more on the reliability of suppliers, production organization capacity and cost control capabilities. These will be decisive factors in the industry's ability to sustain growth in the coming period.

Source: Vitic/ congthuong.vn