Vietnam footwear exports have increasingly had to deal with trade remedies in importing markets over recent times.

Data for 2024 shows that Vietnam remained the world’s second-largest footwear
exporter during the year, with more than $20 billion worth, trailing only China.
Despite its position, however, Vietnam faces mounting risks from trade remedies
employed in major global markets. To avoid losing momentum, experts believe enterprises
must strengthen their response capabilities, improve data transparency, and ensure
full compliance with rules of origin.

Rising trade risks

Vietnam’s total footwear export turnover in the first half of 2025 stood
at roughly $14 billion, including $12 billion from footwear and about $2 billion
from handbags and other leather goods. This marks a 10.1 per cent increase from
the same period of 2024.

Vietnam’s key export markets include the EU, the US, and several Asian economies
such as China, South Korea, and Japan. The US and the EU are the two largest destinations,
but they are also the most likely to impose trade remedies on Vietnamese leather
and footwear items.

According to Mr. Pham Phu Dung, Director of the Training Center at the Vietnam
Leather and Shoe Research Institute, the industry faces not only challenges related
to sustainable development, compliance costs, and the ability to secure its own
supply of materials, but also limitations in science and technology applications
and RD.

The industry frequently confronts the risk of trade remedies imposed by major
importing markets, including anti-dumping, anti-subsidy, and safeguard actions,
as well as tightening standards on sustainability and traceability.

He noted that protectionist trends are rising in many major markets for leather
and footwear products, such as the US and the EU, leading to the increased use of
trade-remedies. For example, the EU imposed anti-dumping duties on leather shoes
beginning around 2006 and ending in 2011; Turkey previously implemented safeguard
measures on Vietnamese footwear; and both the US and the EU have applied anti-circumvention
measures on sports shoes, with investigations focused on products routed through
third countries.

In addition, other countries, including Brazil, Mexico, Turkey and India, have
launched investigations or issued warnings about potential trade remedies against
Vietnamese leather and footwear products due to concerns over possible “trade diversion”
from China to Vietnam.

Mr. Dung outlined five main reasons why Vietnam’s leather and footwear sector
faces such measures. First,
rapid and sharp export growth. Vietnam’s leather and footwear exports have reached
about $20 billion annually since 2018, including footwear and handbags. This rapid
expansion has prompted domestic manufacturers in importing markets to allege injury
and seek protective action. Second,
Vietnamese products are sometimes sold at prices lower than production costs in
the importing country, leading to allegations of dumping.

Third, production
shifts from countries facing high tariffs, such as China, which maintains extensive
trade links with Vietnam in materials and finished goods, may trigger allegations
of tariff circumvention if manufacturing in Vietnam fails to meet rules of origin.

Fourth, importing
markets argue that Vietnam’s heavy reliance on imported raw materials, such as leather
and accessories, makes pricing less transparent. Though Vietnam is the world’s second-largest
footwear exporter, most production still follows simple contract manufacturing models.

Additionally, data transparency remains low. Many domestic firms operate as
household businesses. The prevalence of small workshops and household-level producers,
some working as subcontractors, makes it difficult to provide transparent financial
and accounting data to investigating authorities, complicating efforts to prove
that products are neither dumped nor subsidized.

Moreover, enterprises face challenges in proving domestic value added, sourcing,
and product quality to meet rules of origin; an increasingly important issue as
supply chains shift under the pressures of global conflict and disruption.

Fifth, the sector
has yet to take proactive steps to prevent potential trade remedies. Responses often
occur only after cases arise, leaving the industry without adequate monitoring or
early-warning systems to track export fluctuations or detect risks in major importing
markets.

Towards full autonomy

Faced with growing trade remedies from major import markets, experts have outlined
several strategic directions and solutions for Vietnam’s leather and footwear industry.

First, diversification of markets and products. According to Mr. Dung, the
most important requirement is that enterprises avoid excessive dependence on any
single market. Rather, they should capitalize on opportunities created by Vietnam’s
new-generation free trade agreements to expand into alternative export destinations.

Second, strict compliance with rules of origin. Ms. Nguyen Hang Nga, Deputy
Head of the Foreign Trade Remedy and Handling Division at the Trade Remedies Authority
under the Ministry of Industry and Trade (MoIT), stressed that compliance with rules
of origin means enterprises must both actively localize their supply of materials
and ensure clear traceability mechanisms and reliable, transparent certificates
of origin. “This is essential to counter claims of tax evasion that often arise
during trade remedy investigations,” she said.

Improving accounting transparency and traceability systems is also crucial.
Enterprises must maintain clear, transparent bookkeeping and establish robust systems
for tracking product origin.

In addition, companies need to modernize technology and develop green products,
accelerating digital transformation, adopting green manufacturing processes, using
recycled materials and applying circular-economy models, turning risks into competitive
advantages.

Beyond enterprise-level efforts, the MoIT and the Vietnam Leather, Footwear
and Handbag Association (Lefaso) must strengthen awareness about and capacity for
trade remedy responses through training courses, workshops, and outreach programs.

They must also build databases on pricing, costs and product origin, and provide
timely responses when investigations arise. Supporting enterprises in meeting market-required
certifications will help enhance the industry’s image and credibility. Early warning
systems, continuous monitoring, and legal support during investigations are equally
vital.

Strategically, Vietnam’s leather and footwear industry should shift from its
current Original Equipment Manufacturer (OEM)-dependent model towards Original
Design Manufacturer (ODM) production with more control over design. The longer-term
goal is full autonomy, from production to design to exporting products under enterprises’
own brands.

VET-Huong Loan