Vietnam tops US textile market but USD 49bn goal at risk

Data for the first quarter of 2026 show the industry maintaining steady growth despite global volatility. In March alone, exports reached USD 3.82 billion, up 4.4 per cent year on year.

In the first three months, total exports stood at USD 10.54 billion, up 2.3 per cent. Garments accounted for USD 8.84 billion, while fibre exports reached USD 1.7 billion with faster growth. The United States remains the sector’s largest market.

According to executives at Vietnam National Textile and Garment Group, Vietnam has held the top market share in US textile imports since 2025, as China’s share declined. In the first two months of 2026, Vietnam accounted for 19.3 per cent of US textile imports, maintaining its leading position.

Industry analysts say global competition is shifting away from China towards ASEAN and South Asia, creating opportunities for Vietnam. Beyond market share gains, Vietnamese exporters are increasingly valued for supply chain reliability, production flexibility and the ability to handle complex orders.

However, the outlook remains uncertain. Global textile demand is forecast to grow by only around 3 per cent in 2026, a figure that may be difficult to achieve given escalating geopolitical tensions since late February.

Conflicts in Ukraine and the Middle East, along with broader trade frictions, are disrupting global supply chains and weighing on demand.

Industry leaders warn that this is a period of “unpredictable volatility”, requiring rapid adaptation to maintain Vietnam’s position among the world’s top three exporters.

Businesses are already feeling the strain. Logistics costs have risen sharply, delivery times have lengthened and demand in some markets remains fragile, forcing companies to restructure operations and optimise costs.

A persistent weakness is Vietnam’s heavy reliance on imported raw materials, particularly fabric, while supporting industries remain underdeveloped. At the same time, compliance costs linked to environmental and social standards are increasing.

Notably, the absence of a bilateral free trade agreement with the United States limits Vietnam’s ability to benefit from tariff preferences, unlike in markets such as the EU, Japan and South Korea under agreements including EVFTA and CPTPP.

Against this backdrop, the sector’s target of USD 49 billion in exports this year is seen as highly challenging and will require coordinated, systemic solutions.

Experts say priorities should include diversifying markets and customers, strengthening domestic supply chains, upgrading technology and accelerating green transformation.

Building stronger linkages within domestic and international supply chains to increase localisation rates is viewed as critical to maximising the benefits of existing trade agreements. Investment in innovation, including artificial intelligence and workforce development, will also be key to improving productivity and competitiveness.

Officials say the sector should also focus on developing Vietnamese brands for both domestic consumption and export markets.

At the policy level, the Ministry of Industry and Trade emphasised that textiles remain a pillar of Vietnam’s economy. In 2025, export turnover reached USD 46.2 billion, up 6 per cent, with a trade surplus of USD 21 billion.

Beyond exports, the domestic market of more than 100 million people is emerging as a new growth driver. In 2025, it was valued at around USD 5.5 billion, highlighting significant untapped potential.

Authorities say Vietnam aims to balance export expansion with domestic market development, strengthening global competitiveness while tapping into internal demand.