Focus on production, promote textile growth

The US government's temporary imposition of a 10% reciprocal tax on Vietnamese goods for 90 days is considered a "golden time" for businesses to boost exports and soon complete their set goals.

Garment production for export at Garment Corporation 10.

Along with that, the enterprise also drastically implemented solutions to diversify markets, products, and customers, thereby promoting the stable and sustainable development of the textile and garment industry.

Currently, textile and garment enterprises are accelerating production of goods to best meet customer demand, while proactively developing solutions to adapt to possible risks of tariffs re-imposed by the US in the near future.

Make good use of the opportunity

According to Bach Thang Long, Deputy General Director of Garment 10 Corporation, when the US announced a 46% reciprocal tax on Vietnamese goods, although it was not applied immediately, it immediately created a wait-and-see effect throughout the supply chain. Some international customers temporarily suspended orders, causing production to slow down.

However, after the 90-day tax deferral was announced on April 10, the market immediately recovered, with customers urgently requesting short-term delivery. This is both a challenge and an opportunity for businesses, requiring them to quickly switch to the FOB (buy raw materials, manufacture, sell finished products) and ODM (original design manufacturing) models to increase value.

For May 10, the company has proactively renegotiated with customers in the spirit of sustainable cooperation, optimized production capacity, sought alternative sources of raw materials, and prepared long-term response scenarios if taxes are re-imposed. In the past 5 months, the company's revenue exceeded the plan by 6% and exceeded it by 15% over the same period. The current number of orders is sufficient until the end of the second quarter and is being negotiated for the third quarter. However, due to fluctuations in tax policies from the US, some customers are temporarily waiting for clearer signals before making a decision.

“Determining the 90-day period as the “lightning speed” time to produce and complete important orders before July 5, May 10 has reorganized the production line, worked overtime reasonably, and launched a system-wide competition to soon complete the milestones,” Mr. Long emphasized.

Similarly, General Director of Hung Yen Garment Corporation Pham Thi Phuong Hoa affirmed: The entire system is having to concentrate on production, soon complete and deliver to customers in June and early July. The unit has a plan to continuously produce until mid-August and is continuing to discuss to receive more orders.

However, the number of orders in the US market tends to decrease, in return, the market share from other markets such as Australia, the UK and Europe is increasing and gradually shifting to Vietnam. Although the unit price is likely to decrease slightly in September and October, the decrease is not large. Therefore, this is a golden opportunity for businesses to boost production and soon complete the yearly target.

The Southern Textile and Garment Corporation (VSC) has also been promoting the deployment of production to cope with the US tariff policy.

VSC General Director Nguyen Hung Quy said that the company has received enough production orders until the end of August and is focusing on production and early delivery to partners. The company has proactively developed other markets such as Europe and the UK. The proportion of orders from these markets in the last months of the year has increased compared to the beginning of the year.

“Despite receiving requests for price reductions from partners, the company still maintains its stance of not reducing prices immediately and continues to wait for clear signals from the market. It is expected that by the end of May, when there is more official information, the company will work with units in the system to agree on a suitable sharing plan, ensuring consistency when working with customers,” Mr. Quy affirmed.

Profit Optimization

Recently, the International Monetary Fund (IMF) lowered its forecast for global economic growth in 2025 to 2.8% (down 0.5 points from January), and in 2026 to 3% due to US-China trade instability and President Donald Trump's unpredictable tariff policy.

In addition, major economies in the world also had their growth forecasts adjusted for 2025, such as: the US down from 2.8% to 1.8%; Europe down to 0.8% (0.2% lower than the January 2025 forecast); China down to 4% (0.6% lower than the previous forecast); Vietnam down to 5.2% (lower than the 6.1% in October 2024).

In that context, the export turnover of Vietnamese textiles and garments still maintains a fairly positive growth momentum. As of May 15, the export turnover of textiles and garments reached 15.6 billion USD, up 9.7% over the same period. In particular, some key export markets such as the US, Japan, Europe, etc. all have growth, while the Chinese market has a downward trend because this market mainly imports fiber products to produce fabrics.

Commenting on market signals, Deputy Chief of Office of the Board of Directors of Vietnam National Textile and Garment Group (Vinatex) Hoang Manh Cam said that US-China trade relations are showing signs of cooling down with some agreements reached; freight rates are decreasing, and the VND/USD exchange rate is showing positive developments.

In particular, inventories in the US are low, many brands only have enough for the next 6-8 weeks; some competing countries such as Pakistan are experiencing political instability with India; Bangladesh is facing an energy crisis, many fiber factories have to close due to power shortages, etc., leading to a tendency for goods to shift to Vietnam.

However, the Vietnamese textile and garment industry still faces many challenges as the negotiations between Vietnam and the US have not yet concluded; US tariff policies are still uncertain. In addition, consumption in other markets such as South Korea and China is weak and unlikely to recover soon, while the increase in electricity prices since May 10 also affects the production costs of enterprises.

Therefore, businesses need to increase investment in modern equipment, improve labor skills, business management, and reduce costs to improve competitiveness and increase value in the chain.

Vinatex Board Chairman Le Tien Truong said that from now until July 10, the US may have temporary reciprocal tax policies for Vietnam and we have to wait for the negotiation results between the Ministry of Industry and Trade and the Government. Positive signals show that US inventories are low, leading to positive orders in the third quarter. However, the fourth quarter may decrease by 10% due to reduced demand in this market.

On the other hand, current tariff negotiation policies are being implemented by product groups and this will be a favorable opportunity for Vietnam's textile and garment industry. "To reduce pressure from customers, businesses need to renegotiate with suppliers in the supply chain such as fabrics, raw materials, domestic logistics, etc. to share the difficulties together," Mr. Truong noted.

According to Mr. Truong, to overcome the current difficult period, garment enterprises need to strengthen chain linkages, build and share a list of domestic raw material sources to research and use domestic raw material sources when exporting to the US.

When the order situation is favorable, businesses need to optimize profits, strive to complete the annual profit target as soon as possible, thereby being able to make provisions for production organizations as well as avoid tariff risks after the US re-imposes them on Vietnamese goods in the last months of the year.

Source: https://baotuyenquang.com.vn/don-luc-san-xuat-thuc-day-tang-truong-det-may-212639.html