Vietnam's textile and garment exports in the first five months of 2026 presented a seemingly stable but actually worrying performance. According to public data from the Vietnam Textile and Apparel Association (VITAS), total exports reached $17.8 billion, a year-on-year increase of only 0.6%. This growth rate, significantly slower than the double-digit increases in previous years, indicates that the increment in global procurement demand is narrowing, and Vietnam's supply-side advantages are being gradually eroded.
Structural Pressures Behind the Growth
The 0.6% increase, while substantial in absolute terms based on $17.8 billion, highlights a worrying lack of growth momentum. The industry has set a full-year export target of $50 billion, meaning it needs to achieve approximately $32.2 billion in exports in the second half of the year—a formidable challenge.
Rising labor costs are a long-term challenge for Vietnam's manufacturing sector. Over the past decade, Vietnam's minimum wage has increased by about 8%-10% annually, significantly higher than competitors like Bangladesh and Cambodia. At the same time, overseas buyers are imposing stricter requirements on delivery timeliness and product quality, making the model of winning orders purely through price advantage increasingly ineffective. VITAS Chairman Vu Duc Giang has also publicly noted that global trade rules and procurement standards are constantly evolving, leaving less room for low-price competition strategies.
Green Compliance Becomes a Hard Barrier for Western Markets
The U.S. and the EU are Vietnam's two core export markets for textiles and garments, together accounting for over 60% of its export share. However, both markets are simultaneously tightening access rules: carbon emission controls, renewable energy usage ratios, corporate social responsibility audits, and environmentally friendly production processes are all becoming increasingly stringent. For local Vietnamese companies, green production capacity is no longer a bonus point but a lifeline to retain orders.
The problem is that Vietnam's textile and garment supply chain localization rate is only about 50%, with core raw materials like fabrics and accessories heavily reliant on imports. This not only weakens companies' ability to control the green supply chain independently but also prevents Vietnam from fully leveraging tariff reductions and trade facilitation provisions in signed free trade agreements. Simply put, the more Vietnam exports to the West, the more it needs green certification; but the more it relies on imported raw materials, the harder it becomes to achieve low-carbon compliance across the entire chain.
Industrial Upgrade Path: From Low-Cost Competition to Technology-Driven Growth
Facing these challenges, Vietnam's industry is beginning to push for systematic adjustments. The government and industry associations are guiding investment toward high-tech production lines and environmentally compliant projects, while also planning to build green textile industrial parks on a large scale to enhance overall green manufacturing capacity through centralized, low-carbon production platforms.
Filling gaps in the upstream supply chain is another key action. By building an independent domestic raw material supply chain, Vietnam hopes to reduce reliance on imported fabrics and fully unlock the policy benefits of free trade agreements. Additionally, market diversification is on the agenda—while consolidating Western markets, Vietnam is actively exploring emerging markets in the Middle East and Africa to spread single-market trade risks.