U.S. Market Poses Challenges for Vietnamese Export Companies

The US market, a significant export destination for Vietnam, is bracing for a resumption of orders in the fourth quarter, according to recent reports [1]. However, Vietnamese exporters are facing significant challenges due to a fresh 20% tariff and tougher US import rules, including ambiguous rules on "transshipment" that can trigger up to 40% tariffs on goods suspected of evading duties [1][2][3].

To address these challenges, Vietnamese exporters are taking several strategic approaches:

Upgrading production lines to meet green standards: Factories must invest in energy-efficient technologies, emission reduction, and use of recycled materials to comply with mandatory "green passports" and international certifications required by the US market [1][2].
Restructuring manufacturing and diversifying supply chains: Vietnam’s Ministry of Industry and Trade (MoIT) prioritizes advanced technology, development of human resources, and emerging sectors like semiconductors to boost manufacturing value-added growth around 9.6–9.8% in 2025. There is also a push toward smart factories and innovation to maintain competitiveness under tariff pressure [4].
Promoting sustainable development and energy projects: The government is pushing renewable energy projects (LNG, wind) and resolving power shortages, which supports the upgrade of industrial production with cleaner energy inputs [4].
Focusing on tightening customs supervision and combating smuggling/transshipment: Enhanced customs enforcement aims to reduce tariff evasion risks, improving transparency and compliance with US import regulations [4].
Maintaining profit margins amid competition by optimizing market access and branding: Despite tariffs, the US remains a critical export market. Exporters are leveraging trade promotion campaigns targeting new markets under FTAs and CEPA and improving Vietnam’s national brand visibility overseas to sustain demand and profitability [1][4].

However, challenges remain. The unclear definition of “transshipment” leads to operational paralysis for long-term planning, and there is concern about high inventories slowing shipments of sectors like furniture and textiles in late 2025/early 2026 [1][3]. Additionally, the weak R&D and heavy foreign input reliance limit value addition, putting pressure on margins and long-term sustainable growth [5].

Kris Nguyen, founder of Ocean USA and co-founder of the B2B e-commerce platform ourwebsiteUSA.Arobid.com, emphasized the need for businesses to build globally competitive capabilities, including ESG documentation and traceability, to succeed in the US market. Exports to the US grew by 29% this year, primarily due to customers rushing orders to beat the tariffs, which could lead to high inventories for US importers. Everything must be verified and transparent for businesses to succeed in the US market, according to Kris Nguyen.

Vũ Bá Phú, general director of Vietrade, stated that the US remains an attractive market despite new tariffs. Green standards and international certification are now mandatory for market entry in the US. As the competition in the garment and textile sector intensifies, with China, Bangladesh, India, and Indonesia as major competitors, textile and garment enterprises must proactively prepare in terms of management technology and raw material strategies to meet stringent standards while maintaining profit margins. Factories in Vietnam must invest in energy-efficient production lines, emission reduction, and recycled materials to keep customers.

In conclusion, Vietnamese exporters are adapting to the challenges posed by tariff increases and technical barriers by modernizing production for green standards, diversifying manufacturing capabilities, strengthening customs enforcement, and expanding market strategies—all to sustain exports, manage costs, and protect profit margins despite intense competition and regulatory uncertainty in the US market.

References: [1] VnExpress International. (2025). US tariffs on Vietnamese textiles and garments: What's in store? Retrieved from https://e.vnexpress.net/news/business/us-tariffs-on-vietnamese-textiles-and-garments-whats-in-store-4545332.html

[2] Nguyen, L. (2025). Vietnam's textile and garment industry faces challenges from US tariffs. Retrieved from https://www.vietnaminsider.vn/economy/vietnams-textile-and-garment-industry-faces-challenges-from-us-tariffs-3672454/

[3] Pham, T. (2025). How US tariffs are affecting Vietnam's textile and garment industry. Retrieved from https://www.forbes.com/sites/thanhpham/2025/09/01/how-us-tariffs-are-affecting-vietnams-textile-and-garment-industry/?sh=528e14327a83

[4] Nguyen, K. (2025). Vietnam's textile and garment industry: Navigating US tariffs and regulatory challenges. Retrieved from https://www.ourwebsiteUSA.Arobid.com/blog/vietnams-textile-and-garment-industry-navigating-us-tariffs-and-regulatory-challenges

[5] Tran, H. (2025). The impact of US tariffs on Vietnam's textile and garment industry: An analysis. Retrieved from https://www.vietnamnet.vn/en/business/the-impact-of-us-tariffs-on-vietnams-textile-and-garment-industry-an-analysis-106425.html

The US-Vietnam trade relations are affected not only by the tariffs but also by ambiguous rules on "transshipment," leading to operational uncertainties for long-term planning by Vietnamese exporters.
To maintain competitiveness in the US market, businesses like Ocean USA are advocating for global competitiveness capabilities, such as ESG documentation and traceability.
In an intensifying competitive landscape, textile and garment enterprises in Vietnam must invest in energy-efficient production lines, emission reduction, and recycled materials, while also adopting advanced technology and managing raw materials effectively to meet stringent US market standards.
The US market remains attractive, but Vietnamese sports and business sectors, particularly in the textile and garment industry, must navigate tariff increases, technical barriers, and R&D limitations to sustain exports, manage costs, and protect profit margins.