Tariffs, Trade & Textiles: Must Know About Importing Garments From Vietnam in 2025

In 2025, global garment sourcing is no longer just a numbers game. It’s a strategic decision shaped by tariffs, free trade agreements, rules of origin, and shifting trade policies. For the fashion importers, understanding how these elements affect apparel imports is key to maintaining profitability and supply chain agility in such volatile times. 

Whether you’re importing fashion collections, uniforms, or bulk basics, this expert guide unpacks the current tariff landscape, trade agreements, and compliance risks that garment buyers must navigate this year.

Quick Glossary: Tariff & Trade Terms for Apparel Importers

Before we dive in, here are some key terms every garment buyers and importers should be familiar with:

• HS Code (Harmonised System Code): A universal product classification system. Apparel often falls under Chapters 61 (knitwear) and 62 (woven).
• MFN (Most Favoured Nation): Standard tariff rates granted by WTO member countries.
  These typically range from 8–20% for garments, depending on the item and material.
• FTA (Free Trade Agreement): Deals that eliminate or reduce import duties between countries.
• Rules of Origin: Criteria that determine whether a garment qualifies for FTA benefits.
  They define how much of the product’s value must originate from within the FTA member countries. For example, under EVFTA (Europe – Vietnam FTA), the fabric must be woven in Vietnam or another FTA partner country to be qualified.
• Anti-dumping duty: Additional tariffs imposed to counter unfairly priced imports. 
• Transshipment: The rerouting of goods through another country with minimal processing to conceal their origin and avoid higher tariffs.

2025 Tariff Landscape: What’s Changing for Apparel Imports?

US–Vietnam Trade

While Vietnam and the United States do not yet have a formal Free Trade Agreement (FTA), the two countries officially launched negotiations in early July 2025 to establish a reciprocal trade framework that includes revised tariff terms.

Under this agreement, announced on July 2, 2025, the U.S. will impose a 20% tariff on most goods from Vietnam, significantly lower than the initially threatened 46% reciprocal rate (VietnamBriefing, 2025).

However, goods suspected of being transshipped via Vietnam from China may face heightened duties of up to 40%.

By comparison:

• China remains subject to a 30% baseline Most-Favored Nation (MFN) rate, along with additional duties under Section 301, bringing total effective tariffs on apparel imports to approximately 54%  (TheGuardian, June 2025). 

(More at the “China Watch” section.)

• Bangladesh faces approximately 37% duties under U.S. reciprocal tariff measures issued in July 2025 (Fibre2Fashion, July 2025).
  
  

This evolving tariff landscape underscores why many international brands continue to prioritize Vietnam as a sourcing destination — particularly for apparel categories such as jackets, coats, uniforms, and knitwear.

At the same time, it reinforces the growing urgency for sourcing and trade professionals to diversify their supply chains in response to shifting trade dynamics.

KEY EFFECTIVE TIMELINE July 2, 2025: President Trump announced the Vietnam trade deal via Truth Social, confirming the 20% rate and 40% for transshipments. July 7–9, 2025: Formal tariff letters were sent to over 20 countries, locking in reciprocal rates. August 1, 2025: Final implementation date for most new tariffs, unless a country negotiates a bilateral exemption.

EU–Vietnam (EVFTA)

The EU–Vietnam Free Trade Agreement (VietnamBriefing) continues to phase out tariffs on eligible garments. 

In 2025, many Vietnamese clothing items now enter the EU duty-free—if they meet rules of origin criteria. 

For example, a T-shirt made in Vietnam using Vietnamese or EU-sourced fabric qualifies.

But if the fabric is from China, it likely won’t qualify. In this case, the EU imposes its standard Most Favored Nation (MFN) tariff on these products.

Specially:

• The average MFN tariff for Vietnamese clothing exported to the EU is about 12%.
• Depending on the specific product category, the tariff rate can range from 12% to 18%. 

UK–Vietnam (UKVFTA)

After Brexit, the UK signed a bilateral deal with Vietnam mirroring the EVFTA.

Many clothing items imported into the UK from Vietnam are eligible for 0% tariffs in 2025 with the correct Certificate of Origin (EUR.1).

Form EUR.1 is issued by Vietnam’s Ministry of Industry and Trade. Your supplier can apply for this document and present it at export to prove the product’s origin to UK customs authorities.

Otherwise, these goods will be subject to the UK’s standard Most Favored Nation (MFN) tariff rates of around 12%, as set by the UK Global Tariff.

China Watch

As of July 2025, Chinese garment and textile exports to the U.S. continue to face significant tariff pressure under Section 301. This U.S. trade law, in place since 2018, allows the government to impose additional duties—typically between 7.5% and 25%—on imports from countries engaged in unfair trade practices. 

For apparel, this has pushed effective tariff rates on Chinese goods to 54% or more, including a ~30% MFN baseline and cumulative penalties (Time, July 2025).

While the EU and UK do not impose Section 301-style duties, they are tightening environmental and ethical trade regulations. Measures such as the Carbon Border Adjustment Mechanism (CBAM) and new forced labor traceability laws, particularly those scrutinizing cotton sourced from Xinjiang, are adding pressure on Chinese textile exports to those markets.

📌 Applied Date Note: China has been granted a temporary tariff pause extension until August 12, 2025, providing a short window for further bilateral negotiations before new duties are fully enforced (Reuters, July 2025). 

FTA Cheat Sheet for Garment Importers

EVFTA:

• Who benefits: EU importers from Vietnam
• Tariff status in 2025: Many at 0%
• Key rules: Fabric-forward rule; Form EUR.1 required

UKVFTA:

• Who benefits: UK importers from Vietnam
• Tariff status in 2025: 0% for many items
• Key rules: Origin documentation needed

CPTPP:

• Who benefits: Canada, Japan, Australia, etc.
• Tariff status in 2025: Reduced or 0%
• Key rules: Yarn-forward rules apply

RCEP:

• Who benefits: ASEAN + China, Korea, Japan
• Tariff status in 2025: Limited impact on apparel so far
• Key rules: Origin rules under development

👉 Pro Tip: Most Vietnamese-made garments are eligible for reduced or zero tariffs under current FTAs—provided they meet the rules of origin. Ensure your factory and fabric suppliers follow these guidelines to unlock the full benefits.

Rules of Origin: Your Key to Unlocking Duty-Free Imports

FTA benefits depend on where your garment components come from—not just where the final item is sewn. Vietnam offers excellent opportunities for duty-free access, but your supply chain needs to align with the agreement’s requirements.

• Yarn-forward rule: The yarn used to make the fabric must originate in an FTA member country.
• Fabric-forward rule: The fabric must be woven and finished within the exporting country or FTA zone.

For most FTAs like CPTPP or EVFTA, simple cut-and-sew in Vietnam alone isn’t enough.

In reality, achieving tariff savings by aligning fabric and yarn sources with Free Trade Agreement (FTA) rules of origin (RoO) in the textile industry is not easy, as many manufacturing hubs still couldn’t compete with the robust textile scene of China.

So be sure to discuss options with your manufacturing partners/ suppliers to unlock favorable tariff benefits.

 2025 Watch List: Risks Beyond Tariffs

Tariff rates are only part of the story. Here’s what else to watch:

1. Carbon Border Adjustment Mechanism (CBAM) – EU

• Starting in 2025, the EU may impose carbon-based import fees on high-emission industries—including textiles.
• Brands must calculate and disclose carbon footprints of imported clothing.

2. Forced Labour Laws & Traceability

• The U.S. Uyghur Forced Labor Prevention Act (UFLPA) is strictly enforced.
• Imports linked to Xinjiang cotton or unverified supply chains risk detention or rejection at US ports.

3. Changing Classification & HS Codes

• Minor changes in garment design can affect tariff classification—and cost.
• Misclassification can result in penalties or border delays.

Takeaways: How to Lower Duty Costs & Avoid Border Hassles

1. Consult a customs broker to confirm HS Codes before finalising production specs. Classification errors can be costly.
2. Trace fabric origin—not just the sewing location. FTAs often require fabric to come from approved regions.
3. Ensure your supplier can provide valid Certificates of Origin (e.g. Form EUR.1 for EU/UK) to unlock duty-free access.
4. Prioritise FTA-compliant sourcing regions like Vietnam and the EU when building your supplier network.
5. Partner with a logistics provider who understands textile-specific trade rules and documentation workflows.
6. To prevent transshipment tariffs, ensure garments undergo more than minimal processing, such as repackaging or relabeling.

Need a manufacturing partner who understands the fine print of tariffs and trade agreements?
Dacotex Group is your go-to for reliable, FTA-savvy apparel production—plus full support on compliance and documentation.

👉 Let’s talk about your next import shipment.