Garment manufacturers in China and Vietnam are navigating uncertainty due to US trade policies.

Recent comments by US President Donald Trump indicate that there are no plans to reshore low-margin industries like textile manufacturing.

Vietnam, which has a US$44 billion garment industry, experienced temporary relief after recent tariff reductions. Despite these reductions, uncertainty persists as they are set to expire unless trade agreements are established.

Manufacturers, like Zhou, a factory owner in China’s Zhejiang province, remain cautious.

“US policy changes by the day, and that’s the worst kind of uncertainty for doing business,” Zhou said, indicating a shift away from the US market.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ US trade policy follows a historical pendulum of protectionism and free trade

Trump’s sudden shifts in tariff policies reflect a centuries-old pattern in American economic strategy rather than mere unpredictability.

The US has repeatedly swung between protective tariffs and free trade since its founding, with the current tension mirroring previous eras of economic uncertainty1.

After the War of 1812, America sharply increased tariffs to protect domestic industries from British competition, with rates peaking at over 60% by 1830. Similarly, the Smoot-Hawley Tariff of 1930 raised import duties dramatically during the Great Depression, triggering retaliatory measures from trading partners that deepened the economic crisis – a cautionary tale for current policymakers2.

This historical context helps explain why manufacturers remain cautious despite Trump’s assurances about textiles – they recognize his statements as potentially temporary shifts in America’s ongoing trade policy oscillation rather than permanent commitments.

2️⃣ Targeted protectionism reflects evolving economic priorities

Trump’s selective approach to reshoring – focusing on high-tech manufacturing while leaving textiles abroad – represents a strategic evolution of America’s traditional protectionist policies.

Unlike the broad tariffs of the 19th century, which aimed to protect most domestic industries including textiles, today’s approach more precisely targets sectors deemed strategically important for national security and economic competitiveness2.

The administration’s focus on “chips and computers…and tanks and ships” rather than “sneakers and T-shirts” suggests a recognition that effective industrial policy must prioritize sectors where the US can maintain competitive advantages – a more nuanced stance than historical blanket protectionism.