Global cotton policy overview – June 2026
In the United States, the United States Department of Agriculture (USDA) has launched the “Great American Cotton Plan” to promote domestic cotton consumption, support cotton growers, and revitalize the country’s textile supply chain. The program encourages the use of natural fibers, expands credit support, modernizes the textile industry, and prioritizes the use of U.S. cotton throughout supply chains. This trend could increase demand for U.S. cotton, potentially affecting raw material competition and international cotton prices.
In India, the government has exempted all cotton import duties from June 1 to October 31, 2026, in an effort to ease supply shortages and lower domestic cotton prices. This policy is expected to significantly reduce raw material costs for Indian spinning mills, thereby enhancing their competitiveness relative to Vietnamese yarn exporter in major markets such as China, Bangladesh, and Turkey.
Meanwhile, China has extended its target price support policy for Xinjiang cotton at CNY 18,600 per ton through 2028 and continues to accelerate the development of its domestic spinning industry. This policy is expected to help sustain cotton supply and expand China’s yarn production capacity, thereby maintaining competitive pressure on Vietnam’s spinning sector.
Against this backdrop, Vietnamese textile and yarn producers need to closely monitor global cotton policy developments and price movements, capitalize on favorable opportunities to lock in raw material purchases, and keep track of yarn price trends in India in order to formulate appropriate pricing strategies and safeguard their export competitiveness.
Latest Regulations on Administrative penalties in the Customs sector
On May 15, 2026, the Government issued Decree No. 169/2026/ND-CP on administrative penalties in the customs sector. The Decree will take effect on July 1, 2026, and introduces several significant changes compared with Decree No. 128/2020/ND-CP.
The new Decree introduces a definition of object and instrumentalities involved in administrative violations, extends the statute of limitations for imposing administrative penalties by an additional year for cases referred by judicial authorities, and adds 6 circumstances in which enterprises will not be subject to penalties when they make supplementary declarations and fulfill their tax obligations in accordance with the guidance of competent authorities.
In addition, the Decree introduces several new categories of customs-related violations and establishes provisions for handling administrative violations in the electronic environment to support digital transformation. It also removes a number of provisions under Decree No. 128 that are no longer considered appropriate. Enterprises should promptly update and familiarize themselves with these changes to ensure compliance with customs regulations from July 1, 2026 onward.
Government accelerates decentralization, reduction and simplification of Administrative procedures and Business requirements
On May 18, 2026, the Government issued Resolution No. 66.18/NQ-CP on decentralization and the reduction and simplification of administrative procedures and business conditions, effective from July 1, 2026. Under the Resolution, several procedures relating to fire prevention and firefighting (FPF) have been abolished, including acceptance inspection and commissioning procedures for projects that have already undergone FPF design appraisal. In addition, documentation requirements for FPF design appraisal have been simplified.
In the area of occupational safety and health (OSH), the procedures for reviewing and assessing the operating conditions of enterprises conducting self-training in occupational safety and health have been abolished.
In the accounting sector, regulations governing the conditions, examinations, issuance, and revocation of accountant certificates will no longer be applied. Individuals who obtained certificates before March 1, 2027, will remain eligible to sit for the auditor examination.
For the construction sector, the processing time for construction permit applications has been reduced to 10 working days, while applications for amendments to construction permits will be processed within 9 working days, provided that the files are complete and valid.
Detailed guidelines for the implementation of regulations on Electronic Employment Contracts
On May 15, 2026, the Ministry of Home Affairs of Vietnam issued Circular No. 08/2026/TT-BNV providing guidance on the implementation of electronic employment contracts (e-contracts) in accordance with Decree No. 337/2025/ND-CP. Effective from July 1, 2026, e-contracts are encouraged as a replacement for paper-based contracts in order to enhance human resource management efficiency and simplify administrative procedures.
Under the new regulations, both employees and employers are required to register accounts on the e-contract platform through the national electronic identification system (VNeID). Each e-contract will be assigned a unique identification number (ID). The platform will also be used to report workforce changes and facilitate the transition from paper-based contracts to electronic contracts. All electronic employment contracts and their appendices will be stored on the system for a period of 10 years from the date of contract termination.
Sharp increase in sea freight rates requires Textile and Garment firms to re-examine logistics costs
International ocean freight rates are rising sharply as the peak shipping season has arrived earlier than expected, with rates for 40-foot containers increasing by 23% to USD 3,433 per container. Freight rates on the routes from Shanghai to Los Angeles and New York have risen by 31% and 20%, reflecting a strong recovery in global shipping demand.
The increase has been driven primarily by companies accelerating shipments ahead of potential U.S. tariff adjustments scheduled for July 2026, rising import demand related to the 2026 FIFA World Cup, and geopolitical risks in the Middle East that have forced many shipping lines to reroute around Africa. Freight rates are expected to remain elevated at least through the end of July 2026.
Under these circumstances, textile and garment enterprises need to review and update logistics costs within their cost structures, proactively plan delivery schedules, secure shipping space early, and fully account for freight rate volatility to avoid unexpected expenses and protect the profitability of their orders.
