Tariffs and Their Impact on Vietnam’s Seafood and Textile Industries

As global trade dynamics shift, Vietnam’s seafood and textile industries—cornerstones of its export economy—are confronting new challenges driven by the imposition and adjustment of tariffs from major trade partners. With the US and EU enacting trade policies aimed at protecting their domestic industries or affecting supply chain choices, the impact reverberates across Vietnam's major exporting sectors. This blog examines the latest news-driven market realities, industry responses, and statistical trends shaping the future trajectory of Vietnam’s seafood and textile exports.

Recent Tariff Developments: News Highlights

• United States: In early 2024, the US re-evaluated its Generalized System of Preferences (GSP) status for Vietnam, resulting in higher tariffs on several seafood and textile products. News agencies reported that tariffs on certain Vietnamese shrimp and catfish products increased by up to 10%, while some textile categories saw escalations as high as 20%.
• European Union: The EU has maintained favorable tariff rates under the EU-Vietnam Free Trade Agreement (EVFTA), but there are increasing concerns about compliance with new environmental and labor regulations tied to product entry. As reported in April 2024, several Vietnamese textile shipments faced delays and additional inspections, causing uncertainty and extra costs for exporters.
• Other Asian Markets: Regional trade shifts were highlighted in recent trade bulletins, with Japan and Korea tightening import protocols, which some analysts interpret as precautionary measures echoing the tariff climate of Western markets.

Vietnam’s Seafood Industry: Riding the Tariff Wave

Seafood exports have traditionally comprised over 15% of Vietnam’s total export revenue. According to Business Insights, Vietnamese seafood exports surpassed $9 billion in 2023. However, the first quarter of 2024 saw a 7% decline in year-over-year seafood shipments, a contraction local industry leaders attribute largely to new tariff regimes in the US and slowed approval processes in the EU.

Market Share and Pricing Pressures: The US remains the leading destination for Vietnamese seafood, accounting for over 20% of total export value. Tariffs have forced many Vietnamese processors to either absorb higher costs—cutting into already thin margins—or raise prices, risking loss of competitiveness. Volatility in global freight costs and stricter technical barriers in other key markets are compounding these challenges.

Adaptation Strategies Emerging

• Industry associations are pushing for product quality enhancements to meet stricter phytosanitary and compliance requirements, aiming to secure preferential tariffs under new trade agreements where possible.
• Producers are diversifying export destinations, with increased shipments to China and ASEAN countries. China-bound seafood exports, for instance, climbed by 12% in the first quarter of 2024 despite other markets contracting.
• There is a growing trend toward value-added processing (ready-to-cook, marinated, or individually portioned seafood items) to increase appeal in tariff-sensitive consumer markets.

Textiles and Garments: Straddling Opportunity and Headwinds

The textile and garment sector is another vital pillar, employing nearly 3 million Vietnamese workers and accounting for around 12% of national export turnover. In 2023, Vietnam’s textile and garment exports reached approximately $44 billion, but Business Insights reported a 5.5% quarter-on-quarter fall in Q1 2024 as tariffs tightened in the US and new due-diligence rules slowed customs clearance in the EU.

Key Market Data:

• The United States is responsible for over 45% of Vietnamese garment exports. With the reimposed tariffs, some medium-sized apparel manufacturers have reported contract downsizing or cancellations as buyers seek suppliers in lower-tariff regions.
• EU market access remains relatively stable due to the EVFTA, but regulatory pressures are mounting. As of March 2024, environmental audits and new documentation requirements caused average EU-bound shipment processing times to rise by 22% over the previous year.

Industry Response: Navigating the Challenges

• Major Vietnamese textile exporters are investing in digitized supply chain solutions to accelerate compliance and documentation, seeking to minimize customs delays and penalties.
• Firms are shifting part of their manufacturing inputs locally to reduce dependence on imported raw materials that might be subject to retaliatory tariffs or cross-border slowdowns.
• Trade promotion campaigns are being ramped up to recapture demand in Canada, Australia, and the Middle East, with recent news reports confirming several new large-scale contracts secured with clients in these regions despite Western market headwinds.

Market-Centric Outlook: What Lies Ahead?

While tariffs have slowed the breakneck growth rates of Vietnam’s seafood and textiles sectors, the broader market context remains adaptive and resilient. Although some investors are wary of persistent trade friction, others are doubling down on local Vietnamese manufacturers, betting on their ability to navigator regulatory changes and sustain export momentum through product innovation and supply chain agility.

Statistical Snapshots:

• Vietnam’s Ministry of Industry and Trade projects a modest rebound in seafood and textile exports for the second half of 2024, driven by increased regional trade diversification and the expansion of higher-value product categories.
• Exporters are reporting a 17% year-over-year increase in investment spending on both compliance (documentation and environmental upgrades) and market expansion initiatives as they pivot beyond traditional tariff-protected destinations.

Conclusion

The impact of tariffs on Vietnam’s seafood and textile industries is both a market risk and an engine of change. Faced with new costs, regulatory pressures, and evolving consumer demands, Vietnamese exporters are embracing a blend of compliance-led upgrades, product innovation, and export market diversification. While the near-term export numbers reflect caution, ongoing adjustments and proactive strategies are positioning these sectors to reclaim growth as tariff and policy climates eventually stabilize.