According to the General Department of Customs (Ministry of Finance), in the first 6 months of this year, textile and garment exports to the US reached 6.96 billion USD, accounting for 44.2% of the total export turnover of the industry. However, compared to the same period in 2022, textile and garment exports to the US decreased by 25.4%.
Textile exports to the US will face difficulties
Sharing at the seminar to support Vietnamese enterprises to participate in the International Supply Chain Events in Vietnam in 2023, organized by the Ministry of Industry and Trade on the afternoon of August 11, Mr. Tran Minh Thang, Head of the Vietnam Trade Office in San Francisco (USA), analyzed the reasons for the decline in Vietnam's textile and garment exports to the US market.
According to Mr. Tran Minh Thang, after the Covid-19 pandemic, US importers are stepping up their search for more diverse sources of goods, trying to reduce supplies from China and focus on nearby suppliers such as Canada, Mexico, Central and South American countries; secondly, developing supplies from allied countries.
For textiles, the US is investing heavily in the supply chain in Central America, specifically countries in the Central American free trade area, typically Dominica, to bring production closer to the US.
"This investment is not only in a certain stage but for the entire supply chain, which will help US businesses consume a very large amount of cotton, yarn... Vietnam is also a leading exporter in the textile and garment sector, so we are facing pressure to share market share with other countries," said Mr. Thang.
Explaining more specifically, Mr. Thang emphasized that Vietnamese textiles are being affected by the Sino-US competition and the law against forced labor for Uyghurs in Xinjiang, China. US importers have been implementing measures to reduce dependence on China. For textiles, China is still the leading supplier to the US market, but its market share has dropped to a record low of only 17.9%.
According to Mr. Thang, the law against forced labor for Uyghurs is directly affecting Vietnamese textile exports to the US, as currently, US businesses are becoming more and more careful in importing garments from Vietnam because of the connection in the supply chain between Vietnam and China, specifically materials originating from Xinjiang.
Mr. Thang also said that another reason for the sharp decrease in demand for textile imports into the US was that in 2020 and 2021, the Covid-19 pandemic disrupted supply. US businesses were worried about a disruption in the supply chain, so in 2022 they imported a very large volume of textiles. After that, the economy went into recession, people tightened their spending, so the large amount of inventory was also the reason for the decrease in demand for textile imports from Vietnam and other markets.
"According to published data, in the first 5 months of the year, the US textile and garment import turnover only reached 31.51 billion USD, lower than 40.89 billion USD in the first 5 months of 2022. Not only Vietnam, US textile and garment imports from China decreased by more than 31%; from India decreased by more than 20.8%, from Bangladesh decreased by 19%...", Mr. Thang said.
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