"US Firms Fear Vietnam Layoffs Amid Trump Tariff Crackdown", 21 February 2025

President Donald Trump’s threats of reciprocal tariffs on U.S. trade partners have American apparel and footwear firms operating in Vietnam fretting over the stability of their businesses.

Nearly half of those entities, including two-thirds of U.S. manufacturers, believe they’ll be forced to lay off workers in the event that the president imposes new duties on Vietnam-made products, according to a study released this week by the American Chamber of Commerce in Vietnam (AmCham)...

The group, which counts companies like Allbirds, Brooks, Caleres, Target, Nike, Victoria’s Secret, Gap Inc. and Columbia Sportswear among its membership, found that uncertainty and unease are running high since Trump threatened to hit countries across the globe with duties equivalent to the ones imposed on U.S. exporters.

More than 100 firms were surveyed between Feb. 4 and Feb. 11, and 81 percent said they’re concerned about what such a trade action could mean for their businesses. That number was even higher among manufacturing firms (92 percent)...

More than three-quarters of AmCham survey-takers, including 94 percent of manufacturers, said new duties would put significant strain on their businesses, reducing access to the critical U.S. export market. “If these tariffs go through, it will be a major setback for our industry. We rely heavily on exports to the U.S., and additional costs will mean reduced competitiveness,” one member said...

According to AmCham, members expressed the belief that tariffs would drive down trade, disrupt long-term business partnerships and ultimately lead to price hikes for U.S. shoppers...

Officials in Hanoi are no doubt hoping to bridge the gap with Washington, but AmCham members aren’t holding their breath for a positive resolution. More than two-fifths (41 percent) said they are considering diversifying their business away from the U.S. and redirecting their exports to other markets.

For the footwear and apparel sectors, which make up a sizable portion of Vietnam’s GDP, divesting from the U.S. consumer market could be easier said than done.

The Vietnam Leather, Footwear and Handbag Association (Lefaso) said that Vietnamese producers exported a whopping $27.04 billion in shoes and leather goods last year, up more than 11 percent from 2023. North America took in 41.4 percent of the footwear and 47 percent of the handbags made in the country.

The association said it’s forecasting those exports to grow by 10 percent in 2025 as the industry ups its quality standards and seeks to do more business with Japan, Europe, Canada and the U.S.

Meanwhile, the Vietnam Textile and Apparel Association (VITAS) said the sector hit its $44-billion export target in 2024, representing year-over-year growth of 11 percent. Now, the country’s apparel industry has set its sights on a target of up to $48 billion.

According to data from the U.S. Office of Apparel and Textiles (OTEXA), Vietnam was the U.S.’ second largest source of apparel imports to China in 2024, representing 18.9 percent of the nation’s total imported clothing market share. That’s a 5.6-percent increase from 2023.

So in spite of their concerns about possible duties, 94 percent AmCham members (and 98 percent of the manufacturing contingent) believe the country “remains a good place to do business.”...