The market environment in 2026 continues to carry significant uncertainties related to tariffs, geopolitics, and logistics costs. In addition, ongoing conflicts in several regions around the world not only increase risks but also directly affect the supply chains of the textile and garment industry. In response to these factors, enterprises within Vietnam National Textile and Garment Group (Vinatex) have conducted early assessments of the potential market impacts in order to develop appropriate response scenarios.
Mr. Than Duc Viet – General Director of Garment 10 Corporation – Joint Stock Company (Garco 10)
Following the ruling issued on February 20, 2026, by the Supreme Court of the United States to terminate global reciprocal tariffs, some customers have decided to keep their basic shirt orders in India instead of transferring them to May 10 Corporation for production as discussed last year. For other product categories such as jackets, trousers, and suits, orders are still secured through May, while jacket orders are currently confirmed through June.
It is expected that Indonesia and the European Union will sign the C3 agreement by the end of 2026, taking effect in 2027, therefore tariffs on Indonesia’s textile and garment exports to Europe could be reduced from 10% to 0%. As a result, some customers may shift their shirt orders to Indonesia.
Since June–July 2025, several U.S. customers have asked Garco 10 to consider shifting or expanding part of its production outside Vietnam, to countries such as Egypt and Indonesia. However, this is a long-term matter that requires careful consideration and thorough evaluation.
Ms. Nguyen Hong Lien – Member of BOD, General Director of Hue Textile Garment Joint Stock Company.
As predicted by Hue Textile Garment Joint Stock Company (Huegatex) since 2025, developments in the 1st quarter of 2026 have shown significant volatility across product segments and customers in the garment sector, while conditions in the yarn sector have been relatively more stable.
For the garment sector, there are more complex products, there is a high volume of orders/order volumes are large, however delivery times are shorter, requiring mass production to be organized across multiple production lines. The number of customers placing orders has also increased, and there are currently no major concerns regarding garment order availability, companies therefore need to plan production operations carefully for the entire 2nd quarter. However, under condition of frequent changes in product mix and shorter production timelines, it is important to consider how to allocate orders in a way that optimizes production efficiency and boosts productivity, particularly as profit margins in the garment sector continue to narrow. In the yarn segment, current order volumes are sufficient to cover about 75% of capacity for April.
Since the conflict between the United States and Iran broke out, Huegatex has recorded more positive trading signals in both the yarn and garment segments. Customers have proactively placed orders earlier than usual. In the yarn segment, transactions have been particularly concentrated in the Chinese market, with trading activity picking up after the holiday period. Meanwhile, garment customers are showing a tendency to push forward capacity bookings, from August and September. However, companies still need to remain cautious and closely monitor the reliability of these orders, as they are frequently subject to changes in design specifications, delivery schedules, and quantities. In some cases, even orders that have already entered production have continued to undergo revisions, and those situations are occurring more often. Overall, both customers and suppliers are hoping for an optimistic scenario in which the conflict situation will be resolved within a short period.
Based on this assessment, in contrast to the first quarter, when concerns were elevated and the focus was on stabilizing production, at this time, Huegatex will focus on identifying appropriate solutions for negotiation in order to enhance the efficiency of its orders. At present, for personnel in the garment sector, the most common approach is to closely monitor and update information from multiple sources, including feedback from customers, diversifying both markets and client portfolios to minimize risks.
Ms. Hoang Thuy Oanh – Deputy General Director of Hoa Tho Textile Garment Joint Stock Corporation.
At Hoa Tho, customers have not yet formed clear assessments of the latest market fluctuations. However, based on the company’s operational experience, we would like to share 4 observations on the current market situation.
First, there are ongoing changes in the order cycle. Order plans for production from mid-June onward are showing signs of slowing compared with usual. This reflects a defensive mindset among customers as they monitor consumer demand and tariff developments. In the 3rd and 4th quarters, production lead times are expected to be shortened so that customers can better optimize their inventories. Hoa Tho has already prepared its management and production operations to remain flexible in handling small, time-sensitive, and more urgent orders.
Second, similar to the situation at Garco 10, customers of Hoa Tho are also undergoing a restructuring of their supplier networks and shifting orders to countries with lower costs and tariffs. Basic product lines have been rapidly relocated to Bangladesh, India, and several African countries with lower tariff in order to offset rising costs and duties. At Hoa Tho, some core products with strong volumes have already been moved elsewhere, leaving mainly smaller, more complex orders that involve new fabrics and materials. There are significant challenges for large-scale factories that specialize in basic items. If competition is based solely on price, our advantages in 2026 could be adversely affected.
Third, concerns about tariff risk management and technical trade barriers. Following the ruling by the Supreme Court of the United States on the reciprocal tariffs introduced during the Trump administration, applied from April 2025 and the subsequent implementation of a global tariff rate of 10%, potentially rising to 15%, customers are now reviewing their entire supply chains. The U.S. government is tightening requirements on origin traceability to prevent violations related to illegal transshipment with the global tariff rate of 10%, potentially rising to 15%, which is lower than the previous reciprocal tariff level of 20%.
. Hoa Tho assesses that the likelihood of existing partners increasing purchase prices or expanding cost-sharing remains very low, because during the period when reciprocal tariffs reached 20%, the company did share part of the burden with customers, but only to a limited extent, as close cooperation was necessary and the level of support was insufficient to fully absorb the additional tariff costs at that time. Therefore, under the current tariff levels of 10% or 15%, customers have not yet provided additional support or price adjustments. In this context, the company continues to work with customers and suppliers to reassess product origin compliance, explore suitable domestic sourcing options, and further negotiate cost-sharing arrangements under the evolving global trade environment.
Fourth, the company anticipates a dual risk stemming from geopolitical tensions and logistics disruptions. The current escalation of tensions between the United States and Iran raises the possibility of renewed disruptions in the Red Sea region. Shipping routes to Europe, particularly those serving the U.S. East Coast may face extended transit times. The company also expects potential container shortages and rising freight rates during this period. Therefore, Hoa Tho is working with its customers to revise production plans and recalibrate delivery schedules in order to avoid supply chain disruptions.
Mr. Nguyen Hung Quy – Managing Director, Member of the Members’ Council, and General Director of Vinatex Textile and Garment Southern Corporation Limited Liability Company (VSC)
With the currently available information regarding U.S. tariff policies, many customers tend to shift some orders to Vietnam. Notably for now, almost all units under the Garment Production and Business Division have secured sufficient orders for production through the end of Q2 2026. It is expected that for all units working with clients within the Garment Production and Business Division, there will likely also be sufficient orders for Q3.
However, Q4 is the period that we need to monitor closely, especially given the situation of the conflict in Iran. At this point, it may not have had an impact yet, but it is certainly expected to affect the prices of raw and auxiliary materials. When the prices of these materials increase, production costs will rise, while customers will definitely not agree to higher prices. Therefore, this will also be a challenge for all units. With market forecasts changing continuously, Q4 of 2026 will be a time that we must closely monitor in order to develop flexible solutions and arrange production appropriately.
Ms. Le Thi Que Huong – Member of the Board of Directors, Deputy Chief Executive Officer of Phu Bai Spinning Mill Joint Stock Company
In general, in terms of the market, before the war occurred, yarn prices and orders were both favorable. Based on existing raw material prices, the market was more favorable and performance improved in March and April. However, as the war broke out, oil prices and fiber raw materials have been affected, and cotton prices have also increased, which is expected to have an impact in May, June, and the coming months. For now, Phu Bai has secured orders through April, and it is necessary to keep track of market changes in the upcoming months.
Ms. Nguyen Thi To Trang – Chief Executive Officer of Vinatex Phu Hung Joint Stock Company
In February, the Yarn sector experienced developments that were considered quite positive, particularly with cotton yarn prices rising sharply. CVC and TC yarns also showed improvement. The main reason for the increase in yarn prices originated from China, where rapidly rising cotton prices made domestically produced yarn less competitive compared to imported yarn, leading China to increase its yarn imports. Recently, although the United States has removed reciprocal tariffs, the trend toward stricter origin traceability in customer sentiment across product categories has become very strong, with a large number of orders now requiring 100% U.S. cotton. This trend has become very evident. Some brands have even clearly specified a mandatory requirement for 100% U.S. cotton for very large orders, reaching several hundred tons per order. This trend has continued to attract significant inquiries in recent times.
Q1 has basically been completed. Although prices have been recorded at favorable levels, most orders had already been secured earlier. The price increases are expected to mainly apply to April and May orders, particularly for TC and CVC yarn. I expect that performance in Q2 will improve compared to the same period last year. However, the situation still needs to be closely monitored, as many factors are currently changing market conditions in terms of both demand and customer psychology.
Regarding the impact of the U.S.–Iran war, there has not yet been any clear or direct effect on the yarn sector. Demand inquiries for yarn continue to increase. However, the shock from the conflict and OPEC’s commitments may lead to a potential rise in polyester fiber prices compared to previous levels, although the increase is not expected to be significant. During this period, units can take advantage of the higher polyester fiber prices to adjust and improve their selling prices. When polyester fiber prices begin to adjust downward and cool off, they may consider purchasing to meet their production requirements.
Regarding U.S. cotton, although the trend of purchasing U.S. cotton has increased significantly in recent times, its offer prices are merely recovering and tending to stabilize slightly rather than increase significantly. Therefore, for orders with a high proportion of U.S. cotton, units can take the opportunity to purchase in order to meet production schedules.
Meanwhile, Brazilian cotton has no longer been as competitive compared to U.S. cotton, as China previously focused heavily on buying Brazilian cotton, which narrowed the price gap with U.S. cotton. Purchasing U.S. cotton not only helps meet origin requirements but also provides an advantage in selling prices. Units currently serving orders that require traceability of U.S. cotton origin should take the opportunity to procure in time to meet production needs.
