Deep dive: Vietnam sporting goods exports drive record US trade surplus

Vietnam’s economy grew 8 percent in 2025, powered by record sporting goods exports that helped the Southeast Asian nation post an unprecedented $134 billion (€128bn) trade surplus with the United States – even as Trump administration tariffs aimed to curb the imbalance.

The country’s total exports surged 17 percent to approximately $475 billion (€454bn) last year, with US-bound shipments reaching $153 billion (€146bn), far exceeding 2024’s record of $119.5 billion (€114bn), according to preliminary government data released Jan. 5. Sporting goods manufacturing – particularly footwear, textiles and apparel – accounts for a substantial portion of Vietnam’s export economy and its growing trade advantage over Washington.

Sporting goods sector powers export surge

Vietnam’s footwear exports reached $4.79 billion (€4.6bn) in the first quarter of 2025 alone, up nearly 50 percent year-over-year, according to the country’s General Department of Customs. The industry is on track to exceed its $27-30 billion (€26-29bn) annual target, building on 2024’s estimated $22.9 billion (€22bn) in footwear shipments.

Textile and garment exports tell a similar story. The sector generated $44 billion (€42bn) in 2024, up 11 percent, with the US absorbing $16.7 billion (€16bn) – roughly 38 percent of total textile exports. Industry association VITAS (Vietnam Textile and Apparel Association) projects 2025 textile exports will reach $48-49 billion (€46-47bn).

Combined, Vietnam’s textile, garment and footwear sectors contributed approximately $71 billion (€68bn) to the country’s export economy in 2024, making sporting goods manufacturing a cornerstone of the nation’s trade relationship with the US.

Global brands anchor Vietnam’s manufacturing base

Vietnam has become the primary production hub for the world’s largest sporting goods brands. Nike operates approximately 159 factories across Vietnam producing footwear, apparel and equipment – accounting for roughly 50 percent of the company’s global footwear production. Nearly half of all Nike shoes sold worldwide are now made in Vietnam.

Adidas concentrates 40-43 percent of its global footwear production in Vietnam through 61 factories, primarily in southern Dong Nai province. The German sportswear giant has identified Vietnam as its main production base for large-scale manufacturing. Other major brands maintain significant Vietnamese manufacturing presence: On Holding produces 90 percent of its footwear and 60 percent of apparel in Vietnam; Lululemon manufactures 40 percent of its sportswear there; Puma sources 30 percent of its products from Vietnamese facilities; and Crocs produced 53 percent of its footwear in Vietnam as of 2022.

More than 2,200 footwear factories operate in Vietnam, mostly concentrated around Ho Chi Minh City, producing over 1 billion pairs annually for export to more than 100 countries.

The China connection complicates transshipment claims

Vietnam’s deepening integration into global sporting goods supply chains has coincided with a sharp increase in imports from China – the dynamic at the heart of Trump administration accusations that Vietnam serves as a transshipment hub for Chinese goods.

Vietnam’s imports from China reached a record $186 billion (€178bn) in 2025, up from $144.2 billion (€138bn) in 2024, according to the latest government data. These imports include critical raw materials and components for sporting goods manufacturing: cotton, yarn, textiles, rubber, synthetic materials and footwear components.

The Trump administration has threatened 40 percent tariffs on goods it deems illegally transshipped through Vietnam, though it has not yet specified criteria for determining illegal transshipment. The White House imposed 20 percent tariffs on Vietnamese goods in August, up from the previous 14-18 percent range, specifically citing concerns about Chinese content in Vietnamese exports.

Tariffs fail to slow momentum

Despite the August tariff increase, Vietnam’s exports to the US continued their strong growth trajectory. Fourth-quarter GDP grew 8.46 percent year-over-year, the strongest quarterly performance of 2025, suggesting minimal immediate disruption from the new duties.

“Vietnam is a key link in global supply chains for electronics, textiles, shoes and other goods,” the Reuters report noted. Foreign multinationals “assemble their products in Vietnam, often made of components and raw materials from China, before exporting them – mostly to the United States.”

This manufacturing model – where brands like Nike and Adidas source materials from China, assemble products in Vietnam with lower labor costs, then export finished goods to the US and Europe – has proven resilient even as trade tensions between Washington and Beijing intensified.

For the sporting goods industry specifically, Vietnam offers advantages that offset tariff costs: established manufacturing clusters, skilled workforce, competitive labor rates, and preferential trade agreements including the EVFTA (EU-Vietnam Free Trade Agreement) and CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership).

Manufacturing concentration creates vulnerability

The sporting goods industry’s heavy reliance on Vietnamese manufacturing became starkly apparent when COVID-19 outbreaks forced factory closures in mid-2021. By July of that year, nearly 80 percent of Nike’s footwear manufacturers and half its apparel suppliers in Vietnam had shut down production. Operations didn’t fully resume until November.

The concentration risk extends beyond health crises. An analysis of 11 major sporting goods companies – including Fanatics, Under Armour, New Balance, Amer Sports, Asics and Dick’s Sporting Goods – revealed they utilize 2,508 factories worldwide, with Vietnam hosting 18 percent. When combined with China (35 percent), Indonesia (6 percent), Cambodia (4 percent) and Taiwan (3 percent), more than 80 percent of sporting goods manufacturing capacity sits in regions subject to Trump’s highest tariff rates.

Industry targets point to continued growth

Despite tariff pressures, Vietnam’s sporting goods sector maintains ambitious growth targets. The textile and garment industry aims for $48-49 billion (€46-47bn) in 2025 exports, while the footwear and leather sector targets $29-30 billion (€28-29bn).

Looking further ahead, Vietnam projects leather and footwear export turnover of $38-39 billion (€36-37bn) by 2030, reflecting confidence that the country’s manufacturing advantages – low costs, established infrastructure, trade agreements – will continue attracting orders even in a higher-tariff environment.

The government has set an economic growth target of at least 10 percent annually for 2026-2030, to be endorsed at the ruling Communist Party’s five-yearly congress later this month. Last year’s 8 percent growth, backed by domestic consumption and infrastructure spending, suggests Vietnam is attempting to rebalance its economy away from heavy export dependence.

Trade talks continue as surplus widens

Vietnam remains in negotiations with Washington over a possible trade deal, though specifics have not been disclosed. The Southeast Asian nation “has largely shrugged off US duties of 20% imposed on its goods by the Trump administration to cut Vietnam’s huge trade advantage,” according to the Reuters report.

The record trade surplus has made Vietnam a focal point of US trade policy, second only to China in bilateral trade imbalances. Vietnamese government figures on trade with the US typically run more conservative than US statistics, which show even larger surpluses.

US data through September showed Vietnam’s surplus with Washington had already hit $129.5 billion (€124bn), higher than the $123.5 billion (€118bn) recorded for all of 2024. The final 2025 figure of $134 billion (€128bn) reported by Vietnam represents a roughly 9 percent increase over the previous year’s record.

For the sporting goods industry, Vietnam’s trade surplus reflects a fundamental restructuring of global manufacturing over the past decade. Brands shifted production from China to Vietnam seeking lower costs and supply chain diversification, but maintained reliance on Chinese materials and components. The result is a manufacturing model where value is added in Vietnam but material inputs – and the associated trade surplus – originate substantially in China.

Whether this model can withstand sustained tariff pressure, or whether brands will need to restructure supply chains once again, remains the central question facing the sporting goods industry in 2026.