Vietnam Economic Outlook
Vietnam Economic Outlook (VEO): 2025–2028 — How Vietnam Fits in Your Apparel & Textile Mix
If Guatemala is your North America speed hub and Pakistan your cotton-and-capacity engine, Vietnam is the multi-FTA platform for scaling apparel—while still supplying large U.S. programs. In 2024, Vietnam’s sector recovered to roughly $44B in exports and has kept momentum into 2025.
Why Vietnam still matters
FTA reach + cumulation flexibility. The EVFTA lets Vietnam count Korean fabrics as originating for EU duty relief (when finished in Vietnam). The UKVFTA mirrors this (including a Korea-fabric provision). CPTPP uses yarn-forward rules across its members, opening preferences into Canada/Japan, etc. RCEP adds wide cumulation options within Asia for inputs. Together, these create multiple preferential lanes for the same mill base.
Category depth. Denim, knits, athleisure, outerwear shells, and rising home textiles—with strong vendor bases around HCMC/Dong Nai (south) and Bac Ninh/Thai Binh/Hai Duong (north). Order books through mid-2025 underscore that recovery.
Scale with brand familiarity. For many global brands, Vietnam is already a top-two sourcing base; 2024–2025 updates show resumed growth and widening market coverage.
What the numbers say
2024: VITAS and national trackers peg ~$44B exports (≈+11% YoY). WTO Center
2025 YTD: H1 growth around +9–12%, with VITAS lifting the 2025 target to $47–48B.
Market breadth: Vietnam is selling into 132+ countries, with the U.S., EU, Japan, and Korea as core buyers.
Policy tailwinds you can actually use
EU: EVFTA — qualifying apparel can enter duty-free; Korean fabric cumulation (since 23 Dec 2020) is the practical unlock for EU programs. Build EU capsules on this rule.
UK: UKVFTA — similar duty relief plus a Korea fabric provision; apparel teams can template EVFTA BOMs for the UK with minimal tweaks.
CPTPP — yarn-forward across the bloc (Canada/Japan/others). If you can localize spinning/knitting/finishing within CPTPP, preferences are meaningful.
RCEP — broader cumulation across 15 Asian economies helps optimize upstream inputs where FTA benefits apply (especially fabrics/trims).
Headwinds to price in (and how to mitigate)
U.S. tariff posture in 2025. The U.S.–Vietnam trade announcement set a 20% base tariff on many Vietnamese imports and 40% on goods deemed transshipped via Vietnam (e.g., with Chinese content), creating uncertainty on classification and origin tracing. Build U.S. scenarios with PDDP duty-prepay and split BOMs that minimize non-qualifying Chinese content. ReutersFinancial Times
De minimis is over. The U.S. ended the $800 small-parcel exemption August 29, 2025; plan alternative lanes for samples/DTC micro-fulfillment (brokered entries, prepaid flat fees during transition). Reuters
Power reliability. Vietnam’s northern grid suffered shortages in 2023 and remains tight; policy shifts around renewables and grid investment are ongoing. Diversify north/south capacity, secure interruptible-load MOUs, and price diesel/UPS back-up into SMVs. Reuters+2Reuters+2
Upstream dependence on China. Roughly ~50–70% of fabrics/inputs are still imported—heavy China share—so rules-of-origin and any transshipment scrutiny matter. Pre-approve alternative fabrics from Korea/Taiwan where EVFTA/UKVFTA/CPTPP cumulation is possible. Vietnam+ (VietnamPlus)The Shiv
UFLPA enforcement to the U.S. Even when made in Vietnam, cotton origin must be documented to clear U.S. customs. Keep full tier-3 traceability (farm/ginner/spinner) ready. U.S. Customs and Border Protection+1
Labor cost drift. The regional minimum wage rose in 2024 and remains on watch in 2025; model piece-rate & energy productivity more than wage arbitrage. Vietnam Briefing+1
Lead times & logistics reality
To U.S. West Coast: HCMC (Cat Lai/Cai Mep) → Los Angeles commonly ~21–36 days, depending on service string (premium vs. standard). Use fast strings for fashion basics; standard for replenishment.
To EU North Range: Typical ~25–35 days port-to-port (service-dependent). Pair with EVFTA/UKVFTA plans for bed/bath, denim, and outerwear.
Where Vietnam slots into your 2025–2028 line plan
EU/UK programs with cumulation: Build EU/UK knit/denim capsules leveraging Korea-fabric cumulation(EVFTA/UKVFTA). Keep documentation airtight.
CPTPP growth lanes: Use Vietnam→Canada/Japan for tariff-relieved basics where you can meet yarn-forward (CPTPP).
U.S. resilience: For styles with low China content and clear cotton traceability, Vietnam can still anchor U.S. replenishment (while you keep quick-turn tops near-shore). Bake 20% duty into landed-cost guardrails until rules stabilize.
Ops playbook:
Pre-position greige for knits; dye closer to demand.
Dual-source key fabrics from Korea/Taiwan to protect EU/UK eligibility and reduce transshipment risk to the U.S.
Power-aware scheduling (summer peaks), load-shedding SOPs, and generator fuel buffers at northern sites.
The VEO takeaway
Vietnam remains a core pillar for global brands: multi-FTA access, sophisticated vendors, and scale to carry big denim/knit/home-textile programs. The 2025 calculus is to segment lanes: lean into EVFTA/UKVFTA/CPTPP where rules-of-origin are your friend, and de-risk U.S. flows with tighter BOMs, better cotton traceability, and clear duty assumptions. That mix—FTA-enabled margin plus calibrated U.S. exposure—is how Vietnam strengthens your 2025–2028 network.
For Further Reading:
EVFTA (EU Access2Markets): Korean-fabric cumulation & rules. EU Trade
UKVFTA protocol text: fabric cumulation & RoO. GOV.UK
Vietnam CPTPP rules-of-origin (VNTR/MOIT). vntr.moit.gov.vn
RCEP full text—cumulation across Asia. ASEAN
VITAS/sector momentum (2024–2025). WTO CenterThe Daily Star
USDA FAS: Vietnam Cotton & Products Annual (2025). USDA Apps
Power reliability & policy shifts (Reuters/FT). Reuters+1