For Vietnam the largest apparel supplier to the US market, with nearly $** billion in Chapter ** and ** apparel exports in ****, according to Fibre*Fashion TexPro data the policy changes alter sourcing economics just as global brands finalise fourth-quarter procurement decisions.
The real cost advantage lies in the duty-free quota
At first glance, the tariff differential appears modest. On a $**,*** container of finished apparel, the additional *.* percentage points increase landed cost by roughly $*,***. The real competitive shift, however, comes from the new textile quota. If shipments from Bangladesh or Cambodia qualify for duty-free entry, their Section *** duty falls to zero, widening Vietnam&#**;s cost disadvantage to about $*,*** per container. In an industry where labour typically represents **–** per cent of the manufacturing cost of a basic garment, that difference can directly influence sourcing decisions. Vietnam also starts from a weaker cost position, with manufacturing expenses already higher than several regional competitors, leaving price-sensitive basics such as T-shirts, knit tops and entry-level bottoms most exposed to order diversion.
Figure * : Section *** duty component on a $**,*** apparel container. Illustrative; MFN duties apply separately.
