Vietnam’s apparel exports grew 10.4 per cent from January to October 2019. The US is the largest importer of apparel goods from Vietnam. These imports are up 12.84 per cent year-on-year. Vietnam’s exports to member countries of the CPTPP and the EU also grew significantly. Once the free trade agreement with the EU comes into force, investments in Vietnam’s textile and garment industry are expected to increase further.

There are over 2,000 textile and garment projects in the country. Vietnam’s supply chain diversification has been happening for a few years already, mainly driven by rising labor costs in China. Even before the trade war, Vietnam was getting attention because of the proximity to China and because of the existing infrastructure in the country. The full supply chain has been set up in the country for the past decade already.

Despite the increase, there are some opposite downward pulls. Vietnam has been affected indirectly by the perpetual trade war. Yarn exports to China have fallen this year. The shrinking of global fashion industry has also played a critical role. This fiscal orders received by manufacturers have fallen. Like any other apparel sourcing country, Vietnam needs further investment in high-value items.