More stringent U.S. regulations prohibiting imports from Xinjiang, China, are adding to the strain on Vietnam's textile and footwear manufacturers.
Companies are required by the Uyghur Forced Labour Protection Act (UFLPA) to demonstrate that they do not use raw materials or components made using forced labor in Xinjiang.
- Only 13% of the $15M in apparel and footwear shipments held up for UFLPA checks were allowed into the U.S., with more than 80% coming from Vietnam.
- According to the U.S. Department of Commerce, Vietnam is one of the U.S.' primary sources of cotton clothing. Compliance risks could force Vietnam to make more difficult adjustments, hurting American consumers.
- Vietnam's second-largest employer after agriculture, the clothing industry, has lost about 90,000 jobs since October 2022 due to weakened demand.
- About one in three pairs of shoes that Nike and Adidas sell worldwide, as well as 26% and 17% of their apparel, respectively, are made in Vietnam.
