Export data has sent a clear signal: Vietnam's textile and garment industry is no longer in a high-growth phase. In the first five months of 2026, the Southeast Asian textile hub posted $17.8 billion in exports, a mere 0.6% year-on-year increase. For an industry long accustomed to double-digit growth, this figure signals a fundamental shift in the global order distribution pattern.
Demand Resilience Remains, But Growth Engine Stalls
In absolute terms, $17.8 billion is still a substantial figure, indicating that end-market demand from Europe and the US has not disappeared. Data from the Vietnam Textile and Apparel Association (VITAS) shows that export value grew only slightly, confirming that procurement demand is still being released, but the room for expansion has been compressed. The industry's full-year export target is set at $50 billion, meaning the remaining seven months must achieve approximately $32.2 billion in exports, or about $4.6 billion per month—nearly 30% higher than the monthly average of $3.56 billion in the first five months. For a textile industry driven by overseas orders, this sprint pace is fraught with uncertainty.
Behind the slowdown in order growth is the erosion of Vietnam's founding cost advantage. Domestic labor prices continue to rise, while competitors such as Bangladesh and Cambodia are diverting orders with even lower labor costs. At the same time, overseas buyers are demanding faster delivery times and higher product quality, making low prices alone insufficient to maintain customer loyalty.
Green Compliance: Not an Option, But a Survival Issue
The US and EU are Vietnam's two core export markets for textiles and garments, but both are simultaneously raising trade entry barriers. Carbon emission controls, renewable energy usage ratios, corporate social responsibility audits, and environmentally friendly production processes—these green compliance requirements are no longer bonus points but hard conditions for order access. For local Vietnamese companies, lacking green production capacity means directly losing mainstream channels in Europe and America.
A more intractable problem lies in the weakness of the industrial chain. Vietnam's textile and garment industry localization rate remains at only about 50%, with core raw materials such as fabrics and accessories heavily dependent on imports. This structural defect directly undermines the benefits of free trade agreements—due to rules of origin restrictions, Vietnamese companies cannot fully enjoy tariff reductions, further squeezing export profit margins.
Transformation Path: From Manufacturing Hub to Upstream Value Chain
The optimization directions proposed by industry experts have clear focus: government and industry associations need to guide investment toward high-tech production lines and environmentally compliant projects, while phasing out outdated and energy-intensive capacity. Establishing large-scale green textile industrial parks to create centralized, low-carbon, standardized production platforms is a viable path to improve the industry's overall green production level.
Filling the gaps in the upstream industrial chain is equally urgent. Building a self-controlled domestic raw material supply chain to reduce import dependence is necessary to fully leverage the policy value of free trade agreements. Additionally, leveraging diversified FTAs to explore emerging overseas markets can help diversify single-market trade risks.