Vietnam Garment Industry Tariffs: What Fashion Brands Need to Know in 2025

Written By Matthew Lentz

Why Tariffs Matter for Apparel Manufacturing

Vietnam has become a leading global hub for apparel manufacturing, offering high-quality production at competitive costs. With a highly skilled workforce, modern factories, and strong trade agreements, Vietnam is an increasingly preferred destination for fashion brands looking to scale efficiently. However, import tariffs and trade policies play a crucial role in shaping sourcing decisions. Understanding how tariffs impact costs, supply chains, and profitability is essential for companies looking to manufacture in Vietnam while remaining cost-efficient.

Recent updates in U.S. trade policies, including potential tariffs on imports from surplus trade partners and changes to the de minimis exemption, could impact Vietnam’s garment exports. However, these shifts may also create opportunities for brands looking to diversify sourcing away from China and take advantage of Vietnam’s competitive trade advantages.

This guide will break down Vietnam’s current tariff structure, key trade agreements, and strategies to help fashion brands navigate import duties and optimize production.

Understanding Vietnam’s Apparel Tariffs & Trade Agreements

Vietnam’s textile and garment industry benefits from various trade agreements that offer preferential tariff rates, making it one of the most cost-effective sourcing destinations. Here are some key agreements affecting apparel exports:

  • CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) – Provides reduced or eliminated tariffs for exports to major economies, including Canada, Japan, and Australia, increasing Vietnam’s global competitiveness.

  • EVFTA (EU-Vietnam Free Trade Agreement) – Allows duty-free access to the European Union on many textile and apparel products, provided they meet rules of origin requirements, further solidifying Vietnam’s role as a top sourcing destination.

  • ASEAN Free Trade Agreements (FTAs) – Offer preferential rates within Southeast Asia, making Vietnam an attractive hub for regional production and exports.

  • U.S. Most Favored Nation (MFN) Tariffs – Since Vietnam does not have a bilateral free trade agreement with the U.S., standard tariff rates apply to Vietnamese-made apparel imported into the United States. However, recent discussions on potential U.S.-Vietnam trade agreements could lead to reduced tariffs in the future, strengthening Vietnam’s position as a premier sourcing destination.

Understanding which trade agreements apply to your brand’s sourcing strategy can help minimize costs and leverage tariff reductions effectively.

Recent trade policy changes, including the de minimis exemption update and potential U.S.-Vietnam tariff discussions, could reshape the global apparel supply chain, benefiting Vietnam-based manufacturers.

Current Tariff Rates for Vietnam-Made Apparel

U.S. Tariff Rates on Vietnam Apparel

  • The U.S. applies MFN tariff rates to apparel from Vietnam, which can range from 10% to 32%, depending on the product category.

  • Brands can explore tariff engineering strategies to optimize costs while benefiting from Vietnam’s high-quality and cost-effective production.

  • De Minimis Policy Changes – The recent U.S. policy shift restricting the de minimis exemption (which previously allowed duty-free imports under $800) for Chinese-made goods could benefit Vietnam-based manufacturers by making Vietnamese apparel more competitive in the U.S. market.

EU Tariff Rates on Vietnam Apparel

  • Under the EVFTA, tariffs on many Vietnamese-made garments have been eliminated or reduced, benefiting brands exporting to Europe and making Vietnam one of the top textile exporters to the region.

  • To qualify for preferential tariffs, products must meet rules of origin criteria, requiring that fabrics be sourced from Vietnam or another EVFTA member country.

Country U.S. Apparel Tariffs EU Apparel Tariffs Major Trade Agreements
Vietnam 10-32% (MFN) Reduced/0% (EVFTA) CPTPP, EVFTA, ASEAN FTAs
China 15-38% (Section 301 tariffs) 12% RCEP
Bangladesh 0-16% Duty-Free (EBA Program) SAFTA, EU EBA
India 10-20% 9.6% ASEAN-India FTA

Vietnam’s competitive trade agreements, modern manufacturing capabilities, and skilled labor force continue to make it a preferred sourcing hub for fashion brands worldwide.

Future Outlook: What’s Next for Vietnam’s Apparel Trade Policies?

  • Potential U.S.-Vietnam Trade Talks – Ongoing discussions may lead to a reduction in import tariffs, strengthening Vietnam’s role as a key sourcing hub for U.S. fashion brands.

  • De Minimis Policy Changes Favor Vietnam – With China losing access to the U.S. de minimis exemption, Vietnam-based apparel makers could gain a significant advantage in the fast-moving e-commerce sector.

  • Expansion of EVFTA Benefits – As Vietnam strengthens ties with the EU, brands exporting to Europe may see further tariff advantages, making Vietnam even more attractive for sourcing.

  • Sustainability & Compliance Requirements – Future trade agreements will likely emphasize sustainable production, making compliance with ethical labor and environmental standards even more crucial. Vietnam is already a leader in eco-friendly textile innovation, positioning itself ahead of other manufacturing hubs.

Unlocking Vietnam’s Competitive Advantage in Apparel Manufacturing

Vietnam remains one of the most cost-effective and high-quality apparel manufacturing destinations, with a strong trade advantage over competing markets. By leveraging trade agreements, tariff optimization strategies, and expert sourcing partners, brands can reduce costs while maintaining production efficiency.

With the potential easing of U.S. tariffs, Vietnam's growing trade relationships, and the de minimis policy shift favoring non-Chinese apparel exports, now is the ideal time to explore Vietnam as a sourcing hub.

Pham Fashion House specializes in garment production consulting and apparel manufacturing in Vietnam. If your brand is looking for cost-effective, high-quality apparel manufacturing, we can help navigate tariff complexities and optimize your supply chain.

 

Sources

Matthew Lentz
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