The report noted that the escalating trade tensions between the two superpowers has negatively affected the exchange rate between currencies, therefore pushing the prices of outsourced goods in Vietnam higher than those of other regional countries such as the Republic Korea and China.
This has therefore had an impact on export orders, notably those among textile and apparel businesses.
At present, the export orders of a number of garment and textile firms have been at only about 70 per cent of the figure recorded last year. In particular, the consumption of yarn and raw materials has encountered numerous difficulties with China, which represents a major export market, has reduced the import volume.
Furthermore, the garment sector has experienced a significant drop in export orders. For example, during the first half of 2018, many big businesses in the industry had received orders until the end of the year. However, as of the middle of 2019, local firms have only signed export orders with small quantities.
This fall can be attributed to the fact that several foreign partners have concerns regarding the escalating US-China trade war, resulting in export orders to be divided into small ones instead of large quantities.
Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association, said that the textile and apparel industry has been suffering significant losses since 2018 due to the ongoing trade war.
The tensions between the two nations has put pressure on the supply source of Vietnam's textile and apparel sector as businesses are paying higher costs in order to purchase fabrics, while simultaneously experiencing a decline in prices from export orders, Giang noted.