Press release
Trade Policy Shake-Up Triggers Realignment in Global Footwear Manufacturing
U.S.-Vietnam Tariff Adjustment Sparks Industry-Wide ResponseOn July 2nd, the United States officially implemented a 20% tariff on goods exported from Vietnam, along with an additional 40% punitive tariff on re-exported goods transshipped through Vietnam. Meanwhile, U.S.-origin goods will now enter the Vietnamese market with zero tariffs, significantly shifting trade dynamics between the two nations.
For Vietnam-a major player in the global footwear supply chain-the 20% duty is considered less severe than anticipated, offering a neutral-to-positive outcome. This has provided much-needed breathing room for manufacturers and global brands alike.
Stock Market Reaction: Relief Rally Among Key Footwear Manufacturers
Following the announcement, major Taiwanese-invested footwear companies including Pou Chen, Feng Tay, Yu Chi-KY, and Lai Yi-KY experienced sharp gains in stock price, with several hitting daily limits. The market clearly responded to the relief from the previously expected 46% tariff scenario.
Reuters highlighted that Vietnam is the origin for nearly 50% of Nike's footwear production, and Adidas also depends heavily on Vietnamese supply chains. Concerns remain, however, due to the undefined scope of "transshipment."
According to Lin Fen, CFO of RuHong, "The newly imposed 20% rate is far better than what we feared. More importantly, the uncertainty has lifted. We can now begin renegotiating contracts and adjusting pricing structures with clients."
Image: https://www.grandstarcn.com/uploads/Details-news-1500_400.jpg
Capacity Expansion: Vietnam Remains the Strategic CoreMajor Manufacturers Double Down on Vietnam
Despite global uncertainties, Vietnam remains central to the world's footwear manufacturing base. Key companies are scaling up production, accelerating automation, and investing in smart equipment to meet new demand:
* Pou Chen reports that 31% of its group output comes from Vietnam. In Q1 alone, it shipped 61.9 million pairs, with average prices increasing from USD 19.55 to USD 20.04.
* Feng Tay Enterprises is optimizing its Vietnamese production lines for complex shoe types, with an annual output of 54 million pairs representing 46% of its total production.
* Yu Chi-KY has already begun accepting Spring/Summer orders for Q4, ensuring forward visibility into 2025 operations.
* Lai Yi-KY maintains a 93% production dependency on Vietnam and is executing regional expansion plans to de-risk capacity bottlenecks.
* Zhongjie is simultaneously building new plants in both India and Vietnam to ensure continuity and flexibility.
Production Planning Aligned With Strategic Orders
Several firms have indicated increased focus on operational readiness and early order locking. As factory schedules fill up and capacity nears limits, lean planning and automation investments are key to managing new opportunities efficiently.
Hidden Risks: Transshipment Ambiguities Pose Compliance ChallengesComplex Supply Chains Face Scrutiny
The main unresolved concern is the definition of "transshipment." If critical components like raw materials or soles originate in China and are only assembled in Vietnam, they may qualify as transshipped and thus face an extra 40% punitive tariff.
This has triggered greater caution among both upstream and downstream participants. OEMs are ramping up efforts in compliance documentation, material traceability, and rules-of-origin alignment to avoid potential penalties.
Vietnamese Capacity Nearing Saturation
Local production infrastructure is already under pressure. Many operators report tight lead times, high capital requirements, and long factory-switching periods. Analysts warn that unresolved capacity issues could divert orders back to China or distribute them to emerging production hubs like India or Cambodia.
Strategic Implications for Global Value ChainsShort-Term Gains, Long-Term Decisions
* Short-Term: Market relief has stabilized orders and revived stock values, offering breathing room for buyers and sellers.
* Medium-Term: Compliance standards and flexible capacity will define the next wave of winners in the sector.
* Long-Term: Global brands will increasingly diversify sourcing, accelerating the development of factories in Cambodia, Indonesia, and India.
Time to Invest in Transformation
The trade shift highlights a broader trend: digitalization, automation, and regional diversification will become permanent features in manufacturing strategies. Companies that hesitate may lose their global foothold.
GrandStar: Powering the Next Era of Footwear ManufacturingAdvanced Warp Knitting Solutions for a New Generation
At GrandStar, we offer cutting-edge warp knitting machinery that empowers global footwear producers to navigate volatility with confidence. Our technology delivers:
* High-speed automated systems for efficient upper knitting
* Modular jacquard control for complex design patterns
* Intelligent drive systems with real-time monitoring and diagnostics
* Support for rules-of-origin compliance through localized value-add capabilities
Enabling Clients in Vietnam and Beyond
Top-tier Vietnamese manufacturers are already leveraging our latest EL and SU drive systems, Piezo Jacquard modules, and smart tension control units to deliver quality, speed, and compliance. Our solutions help ensure:
* Stable output for complex uppers and technical fabrics
* Fast reconfiguration to match new design cycles
* Digital connectivity for remote monitoring and service
Shaping the Future Through Innovation
We support our clients' growth by providing integrated, scalable, and intelligent warp knitting platforms-tailored for the fast-evolving needs of the global footwear industry.
Conclusion: Seizing Opportunity With Strategic Vision
The 20% tariff ruling has delivered a short-term win, but long-term strategic adaptation is crucial. Brands and manufacturers alike must:
* Embrace automation and digitally enabled production
* Diversify sourcing while reinforcing compliance frameworks
* Invest in future-ready equipment to secure sustainable growth
At GrandStar, we remain a trusted partner for transformation. Our mission is to help clients weave precision, speed, and reliability into every step of their production chain-wherever they are in the world.
Media Contact
Company Name: Fujian Grand Star technology Co., Ltd
Email:Send Email [https://www.abnewswire.com/email_contact_us.php?pr=trade-policy-shakeup-triggers-realignment-in-global-footwear-manufacturing]
Country: China
Website: https://www.grandstarcn.com/
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