Vietnam’s footwear exports to the U.S. tumbled 27 percent in September to $611 million, marking the steepest decline among all sectors as the impact of U.S. government tariffs increasingly weighs on footwear orders, according to customs data released on Monday, October 6.
On August 7, the U.S. imposed a 20 percent tariff on Vietnamese goods, with transshipments via third countries facing a 40 percent levy. China, a top exporter to the U.S., has reportedly used Vietnam as a transshipment hub to circumvent the higher tariffs it pays on its exports to the U.S.
The new deal between Vietnam and the U.S. replaced President Trump’s April 2 “Liberation Day” tariff assessment, which included a 46 percent blanket tariff on Vietnamese goods that were subsequently paused for 90 days and were due to expire next week.
The initial announcement of higher tariffs on Vietnam shipments was met with panic, as many companies in the apparel, footwear, sporting goods, and outdoor markets have gradually moved more production to Vietnam from China since the U.S. imposed higher tariffs on the country during the first Trump Administration. However, the 20 percent tariff overall and the 40 percent levy on transshipments are still viewed as adding significant margin pressures, particularly for footwear vendors.
China is facing a 30 percent tariff rate and remains a wildcard for the industry, as no formal trade deal has been announced.
According to data compiled by Raymond James analyst Rick Patel, Skechers sources about 40 percent of its shoes from Vietnam, while Nike manufactures roughly half of its footwear in Vietnam and just 18 percent in China. On Running sources around 90 percent of their materials from Vietnam, and Crocs about half.
Evercore ISI analyst Michael Binetti, at the time the Vietnam deal was announced, said the original 10 percent Vietnam tariff faced was “manageable” for manufacturers, “but it’s unlikely that any retailer could completely cover 20 percent, (in addition to the 30 percent pressure from China) and will have to pass [some of the cost] onto consumers.”
And while the 40 percent transshipment tariff is aimed at discouraging Chinese manufacturers from evading U.S. tariffs by routing products through Southeast Asia, it also discourages retailers from relocating production out of China. Binetti asked, “Why bother moving from 30 percent in China to ~25 percent net tariff in Vietnam?”
On an analyst call in early August, Deckers’ CFO Steven Fasching told investors that based on the recent updates, assuming Vietnam increases from 10 percent to 20 percent, the parent of Uggs and Hoka expect to face a tariff impact of $185 million impact to cost of goods sold in fiscal year 2026, up from its previously provided estimate of up to $150 million. Fasching added, “As we said last quarter, we put in measures to recapture up to approximately $75 million, and we’ll continue to evaluate additional levers for potential further mitigation.”
“Vietnam is essential to the U.S. footwear supply chain, especially for athletic shoes,” said Matt Priest, president and CEO of the Footwear Distributors and Retailers of America (FDRA), at the time the August 7 deal was announced. “In 2024, we imported 274 million pairs from Vietnam, accounting for over half of all athletic footwear imports by volume and value. With $10.6 billion in shipments last year, Vietnam is on pace to become our largest supplier in 2025. Disrupting that pipeline with additional tariffs would hit American consumers and our industry hard.”
Priest went on to say that many of those shoes already carry a 20 percent tariff, particularly popular athletic styles.
“Piling new tariffs on top of that isn’t just unnecessary — it’s bad economics. The administration should acknowledge the steep footwear duties already in place and avoid adding more strain to American families and businesses,” he added in his media statement.
Among other categories, textile exports also saw a sharp monthly drop of 20 percent in September, while shipments of phones and components fell by 24.38 percent, according to customs data. Despite these sectoral declines, Vietnam’s overall exports to the U.S declined just 1.5 percent to $13.7 billion in September. Gains were seen in coffee, chemicals and some electronics.
SGB Media’s recently published report, which cites estimates from the United Nations Development Programme (UNDP), indicates that Vietnam risks losing $25 billion due to U.S. tariffs, suggesting that the country is the most exposed to U.S. tariffs in Southeast Asia.
Image courtesy Da-Giay
