Vinatex CEO: 'Holding breath' for US tariff story

Vietnam's textile and garment sector is anxiously awaiting potential U.S. tariff decisions expected after July 24, according to Cao Huu Hieu, general director of Vinatex. Despite this uncertainty, the sector has shown resilience, with exports reaching an estimated $18.8 billion in the first five months of 2026, a 5.6% increase compared to the same period in 2025.

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We are 'holding our breath' waiting for the tariff story with the US after July 24.

This positive performance is attributed to the group's persistent implementation of various solutions, including digital transformation, in a rapidly changing market characterized by weakening demand, increased competition, and growing pressure from tariffs and prices. Notably, all segments of the textile and garment production chain, spinning, dyeing, and garment manufacturing, are reporting profits.

The spinning sector has seen nearly threefold growth, while the garment sector contributes the highest profit margin. The dyeing sector, despite investment challenges due to strict regulations, maintains growth momentum. However, challenges persist, including rising input costs and a trend towards order fragmentation as buyers anticipate market shifts.

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The bright spot is that all segments in the textile and garment production chain, from spinning, dyeing, to sewing, are profitable.

Looking ahead, Vinatex has secured orders for the spinning sector through July and into August and September. For the garment sector, orders are confirmed for August and September, but discussions for the fourth quarter are tentative. Buyers are closely monitoring the U.S. tariff situation, with concerns that higher tariffs for Vietnam compared to China could severely hinder competitiveness in the U.S. market. This uncertainty is already affecting buyer sentiment and reducing demand for orders.

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The most worrying concern is if our tariffs are higher than China's, then the competitiveness door to the US will be extremely difficult.