The new trade policies have become a major cause of concern for several American fashion makers and retailers. The policies are expected to impose severe restrictions on the apparel imports from countries like Vietnam. This was highlighted in the study conducted by the United States Fashion Industry Association (USFIA).
Border Adjustment Tax (BAT) is one such policy that American fashion retailers are highly concerned about. The proposed taxation system would impose a 20 per cent tax on imported goods. This might kill the majority of import benefits that countries like Vietnam enjoy while exporting their goods to the US market.
Additionally, as part of its new policies, the US has also opted out of the much talked-about Trans Pacific Partnership (TPP). This has taken away Vietnam’s advantage to export duty-free garments to the US.
Another aspect that came to light in the survey is that only 36 per cent people wanted to increase their sourcing from Vietnam in the upcoming two years. This marks a significant decrease of 17 per cent from 2016; while, 53 per cent had expressed interest in sourcing from Vietnam. The report; however, stated that 71 per cent of the retailers (a big fall from an impressive 92.3 per cent in 2016) from the US fashion industry are still hopeful that the trade between the two countries would improve.
Besides these, the US is also stressing on manufacturing products within the country and is formulating strategies to promote ‘reshoring’ through ‘Buy American, Hire American Policy’. This is likely to further impact the imports from Vietnam.
The trade policy changes will affect the US retailers as their purchasing cost would go up. Adding to the woes is the strengthening Dong, which is projected to fall by 1.5-2 per cent against the Dollar owing to Vietnam’s positive capital account, higher foreign exchange reserves and stable trade balance.
Bharat Tex Special Report 2026 
