What's even more unacceptable than high prices is having money but not being able to buy anything.
In recent years, the Southeast Asian textile industry was a hot topic among textile workers. I chatted with some fabric merchants back then, and they were very envious of places like Vietnam where orders were booked months in advance. In 2025, Vietnam surpassed China for the first time to become the largest apparel supplier to the United States, with a market share of 17.71%. However, while the textile industries in many Southeast Asian countries have developed rapidly in recent years, they are also highly unbalanced, heavily reliant on foreign investment and tariff policies. To attract investment, local governments often offer numerous policy incentives, such as tax breaks and priority electricity supply, while the benefits to the local economy are relatively limited. Supporting infrastructure has also failed to be completed in the short term, leading to a heavy reliance on energy imports. This is a necessary process for developing countries, but at this sensitive juncture, it has dealt a severe blow to the local economy.
Taking Vietnam, whose textile industry has now reached a certain scale, as an example, Vietnam's dependence on Middle Eastern crude oil is approximately 85%, while its strategic reserves are only enough for about 20 days. After Iran blocked the Strait of Hormuz, Vietnam faced a severe energy crisis. Of course, Vietnam did take action.
According to official announcements from the Vietnamese Ministry of Industry and Trade, Government Office Directive No. 23/CD-TTg, and directives from the Vietnamese Prime Minister's government and the Ministry of Foreign Affairs' press conference on March 12, Vietnam mainly prepared the following measures: • Eliminating import tariffs on refined oil products and raw materials until the end of April, encouraging global sourcing; • Allowing non-essential workers to work from home, with air conditioning maintained at ≥26°C, and plans to reduce civil aviation flights; • Promoting the use of E10 ethanol gasoline ahead of schedule to reduce gasoline dependence; • Requesting temporary fuel supplies from Qatar, Kuwait, Japan, etc. In addition, the Vietnamese Prime Minister recently visited Russia, a major energy producer, seeking Russian energy supplies and selecting Russia as the location for Vietnam's first nuclear power plant. Energy directly impacts factory operations, residents' lives, and logistics. If energy supplies are cut off for an extended period, Vietnam's textile industry will suffer a severe blow; even with money, goods won't be available, and shipments will be impossible. Some risk-averse orders will naturally flow out of the country.
While Southeast Asian countries may be the hardest hit by this conflict, it's not necessarily the case. Many Middle Eastern countries directly facing war, even if the scale of the impact is limited, have lost their peaceful and stable environment. Once something like this happens once, people will fear a repeat. Recently, I saw a news report about a textile factory owner who said in an interview that his Middle Eastern clients suddenly lost contact after the fighting began in Iran. The current escalating situation in the Middle East may have the biggest impact on China's costs, and on some Southeast Asian countries' production, but for Middle Eastern countries already caught in the vortex of war, it may be a matter of life and death.
From January to December 2025, the trade volume of textiles and apparel reached US$313.99 billion, with exports reaching US$293.81 billion. Emerging markets, represented by the Middle East, have become the main driving force for the positive growth of my country's textile and apparel exports. However, with shipping to the Middle East disrupted in the region, exports to the Middle East this year may face some uncertainties.
Over the past decade, the textile industry has experienced several major relocations, but these relocations have mostly followed a cost-driven logic: wherever there is a stable social environment, a sufficient and cost-effective labor force, and convenient transportation, it is likely to attract capital. However, since the US imposed Section 301 tariffs on China, the situation has changed significantly. Investment in the textile industry has begun to move beyond a cost-driven logic. Recent events such as the Red Sea crisis, retaliatory tariffs, and the current geopolitical conflict with Iran have all had a significant impact on the traditional global supply chain logic. Even if the Iranian issue is ultimately resolved, the threat of sudden supply chain disruptions will inevitably prompt capital to consider supply chain security more in future industrial layouts. The global reshuffling of the textile industry continues.
