Why More Fashion Brands Are Nearshoring to Vietnam Amid Rising Tariffs and Supply Chain Chaos

Informational • 8m read

Why More Fashion Brands Are Nearshoring to Vietnam Amid Rising Tariffs and Supply Chain Chaos

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Mai Nguyen • Jun 02, 2025

Fashion brands are stuck between a rock and a hard place. Supply chains are still a mess, material costs keep climbing, and shipping prices and tariff costs swing wildly—all while customers expect faster deliveries than ever. Whether it’s backed-up Asian mills or endless port delays in Los Angeles and Shanghai, hold-ups of weeks (or months) are now standard. That’s why brands are drowning in extra costs and struggling to stay relevant season after season.

And it’s about to get worse. U.S. manufacturers have sounded the alarm that new tariffs on Chinese goods (probally 30%) will soon mean higher retail prices for American consumers in the coming weeks, as brands have no choice but to pass along the extra costs.

So here’s the billion-dollar question: How do you keep producing great fashion without losing speed or profits?

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Can Vietnam Replace China in Global Fashion Manufacturing?

These days, smart fashion brands aren't just asking "what" to produce - they're rethinking "where" to produce. Enter nearshoring: making clothes closer to where they'll be sold. Instead of manufacturing across oceans (like in China or Bangladesh), companies are choosing nearby hubs like Mexico for the U.S. or Turkey for Europe.

While overseas production used to mean lower costs, the hidden headaches add up - month-long shipping delays, unpredictable freight costs, and being locked into production cycles way before you know what'll sell. Nearshoring solves this by letting brands restock hot items in weeks not months, adjust to trend mid-season, and cut down on expensive warehouse stock.

But there's a new twist. With rising tariffs and global instability (from U.S.-China tensions to Middle East conflicts), even traditional nearshoring carries risks. That's why forward-thinking brands are looking to the sweet spot: Asia-Pacific countries that offer the perfect balance of proximity and stability.

As global supply chains diversify, Vietnam has emerged as a compelling alternative to China manufacturing, offering distinct advantages in cost, flexibility, and speed. Below is a side-by-side comparison of key criteria for businesses evaluating these two manufacturing hubs:

Criteria

Vietnam

China

Tariffs

10% (under negotiation until July 2025)

30% (under negotiation)

MOQ Flexibility

High (easier small-batch production)

Low (favors large-scale orders)

Lead Times

30–45 days (shorter shipping)

45–60+ days (longer logistics)

Labor Cost

Lower ($250–400/month) 

Higher ($500–800/month)

And Vietnam is that sweet spot that everybody is chasing. The country’s heavy investments in automation, digital worker training, and trade deals (like CPTPP/EVFTA) have slashed production times from 12-16 weeks to just 4-6 weeks. With efficient customs, digital tracking, and skilled workers, Vietnam delivers the perfect balance of speed, cost, and sustainability that modern brands need.

Key Advantages for Nearshoring to Vietnam Apparel

Vietnam has exploded onto the scene as both an economic powerhouse and a fashion production leader. More brands than ever - from household names to up-and-comers - are choosing Vietnam for their manufacturing. Here's why Vietnam should be on your radar:

  1. Fast Turnaround and Low MOQs

Not as same as the old traditional manufacturing, today’s Vietnam manufacturing ecosystem is uniquely designed to support low MOQ clothing manufacturers. With flexible, small-batch capabilities and an increasing focus on on-demand production, Vietnam is ideal for direct-to-consumer (DTC) and emerging fashion brands looking to test styles without overproducing.

Whether it’s the first 100 pieces or a scaled rollout, Vietnamese factories offer faster development cycles and shorter lead times compared to many offshore locations—allowing brands to stay agile and competitive.

  1. Skilled Workforce and Cost Efficiency

Like top apparel countries in Asia, Vietnam boasts a long-standing reputation in garment production, supported by a highly skilled workforce. In Vietnam, low cost doesn’t mean low value. What really sets Vietnamese factories apart is their ability to execute complex techniques, from intricate and premium denim washes to precision tailoring.

Vietnam provides competitive labor and overhead costs, typically lower than those in China or the EU, while maintaining consistent quality. This cost advantage enables brands to protect profit margins while still producing premium products for their customers.

Today's Vietnamese manufacturers blend this heritage of craftsmanship with cutting-edge digital integration. Workers are trained in advanced digital systems, giving brands complete visibility through production tracking while maintaining that human touch for quality details. It's this perfect marriage of traditional skill and modern tech that makes Vietnam the go-to partner for quality-focused fashion brands.

  1. Trade & Sustainability Advantage 

Vietnam’s participation in key trade agreements like CPTPP, EVFTA, and UKVFTA offers fashion brands significant advantages, including preferential tariffs, lower import duties, and easier access to markets in the EU and UK. The country is also speeding up delivery across the Asia-Pacific region and expanding direct shipping routes to the U.S., strengthening US-Vietnam trade in fashion. By collaborating with leading apparel-producing countries like India and China, Vietnam is making global supply chains more stable and responsive.

If your brand values sustainability, Vietnam should be at the top of your sourcing list. Vietnam’s government has embedded sustainability into its national growth strategy, it is clear in its policies that balance economic growth with social welfare and environmental care. Current efforts include designating areas for social security and employment, while also investing in modern public transportation systems such as the North-South express railway and future rail connections to neighboring countries like Beijing (China). In addition, most companies in Vietnam are subject to strict legal and certification checks. From ethical labor to eco-friendly materials and waste-reducing practices, Vietnam proves that fashion manufacturing can be both cost-effective and responsible.

Big Brands Already Trust Vietnam — Should You?

Nike is one of the top global brands with a major presence in Vietnam, and others like Adidas, Uniqlo, Steve Madden, Reformation, Urban Outfitter and GANNI are following suit. These brands are drawn by Vietnam’s rapid development, trade advantages, and growing reputation as a leading destination for apparel production.

In the near future, more fashion brands are expected to shift their supply chains to Vietnam, not just for cost benefits but for its smart, future-ready partner for fashion businesses aiming to scale responsibly and efficiently. 

Looking for a reliable manufacturing partner in Vietnam?

At Inflow, we have 150+ vetted suppliers and manufacturers across Vietnam and neighboring countries. We help fashion brands find the right partners and leverage high-tech production methods to prototype and manufacture 4x faster using AI-powered design tools and low MOQs. Get in touch today to explore agile, sustainable sourcing tailored to your needs.

Book a demo with Inflow this week to discover tailored solutions for your unique needs.

Stay tuned – more exclusive supply chain insights are coming next week!

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