The retail industry is pushing a sigh of relief after seeming to avoid the worst case on Vietnam prices.
But some leaders believe that the provisional trade agreement, president of the president, Donald Trump, announced that Wednesday is still bad for business and could have a scary effect on consumer spending.
“This is a lot of better news than where we were release day,” a CEO of a popular consumer brand at CNBC said after Trump said that the prices on Vietnamese imports are 20%, down compared to the 46% tax he proposed on April 2, then suspended later. The new rate would be double the law of 10% currently in place.
Another executive called The News “Bad” but agreed that a 20% price was better than the right of 46% that Trump initially imposed, as unrealistic as the proposed rate was.
“I guess Trump needs” positive “,” said a third framework. “I think things will evolve. Let’s see if it’s final.”
Trump’s announcement on Wednesday intervened only a few days before the expiration of the 90 -day suspension of the steep prices he offered in April next week, and while his administration rushes to conclude agreements with dozens of business partners. Despite this, he did not say when the agreement with Vietnam would take effect, or if the two parties accepted the rate rates.
In the months between the deployment of Trump’s April 2 rate of April 2 and its announcement on Wednesday, retail managers in the clothing and shoes industries were worried about the potential that Vietnam imports could face almost as high tariffs as cumulative rights of 55% for Chinese imports.
Over the past decade, some of the best American retailers, including Gap,, American eagle And Nikehave all reduced their dependence on China to protect themselves from high prices and geopolitical turbulence in the region.
Many refugees sought in Vietnam, where factories, some belonging to Chinese companies, are known to produce products at a quality and a price similar to those of China. They also started to make in other countries in Southeast Asia, such as Cambodia, Bangladesh and Malaysia. These countries were faced with rates of 49%, 37% and 24%, respectively, as part of Trump’s April plan, but are subject to 10% for the moment.
Vietnam is now the second largest supplier of shoes, clothing and accessories sold on the American market, according to the commercial group of the industry The American Apparel & Footwear Association. It has become an essential element of the shoe supply chain, on the pace to become the largest shoe supplier in the United States in 2025, according to shoe distributors and America retailers, another commercial group in the industry.
If the price proposed by Trump of 46% on Vietnam had taken effect, this would mean that a large part of the work of the industry to leave China would have been for nothing. Some companies are relieved that the provisional agreement would take the 20% withdrawal and the announcement agreement is also a sign that Cambodia, Malaysia and Bangladesh could reach similar executives.
“Twenty percent is a sigh of relief,” said Sonia Lapinsky, partner and director general at Alixpartners who advises fashion brands. “There is a certain positivity and a certain optimism that it is manageable. So, at least there is that. It is not business, which is great. However, it has real implications, right?”
Most companies have many tools to compensate for the impact of prices, such as working with their suppliers to share costs. But to avoid the main strokes of their beneficiary margins, many, including Nike, plan to increase prices. We still do not know how these hikes will affect consumption expenses, because it will take time for increases to flow in the supply chain.
Alixpartners previously created price models for CNBC which have examined how the price of Vietnamese sweaters and manufacturing shoes could increase under the prices offered by Trump – if retailers do not transmit any costs to suppliers or buyers. At 10%, the cost of a pair of $ 95 shoes could increase by $ 7.42 to $ 102.42. With a service of 20% in place, the increase in costs would be even greater.
Many executives fear that a price increase of this magnitude will be bad for businesses and consumers. Paul Cosaro, CEO of Picnic Time, a supplier of the best retailers like Target,, Kohl And Macysaid that if the clocks were in April and Trump said there would be a 20% tariff on Vietnamese imports, “no one would have been happy.”
“There could be threats from a price of 46% and you come back with 20 and it will sound better but … It’s just more money that leaves consumers’ pockets at the end of the day and they have less money to spend for picnic baskets and coolers and things like that,” said Cosaro, which increased its prices between 11% and 14% earlier to compensate the cost of China Tariffs.
“It’s not good for the consumer. In the end, it only increases prices … I don’t think that is good news.”