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The ongoing trade war between the United States and China has significantly altered global trade patterns, particularly in the textile and apparel industry. As the U.S. imposes high tariffs on Chinese goods, other textile-exporting nations are positioning themselves to seize the opportunity. Among the biggest contenders are India, Vietnam, and Bangladesh, each vying to capture a larger share of the lucrative U.S. textile market. But which country stands to benefit the most?

Impact on China: The Struggle to Retain Market Share

China has long dominated global textile exports, accounting for a significant portion of U.S. textile imports. However, escalating trade tensions and tariff hikes on Chinese goods have led to a notable decline in Chinese textile exports to the U.S. The U.S. imposed tariffs on billions of dollars worth of Chinese goods, including textiles and apparel, making Chinese products more expensive for American buyers.

To counteract this, Chinese manufacturers have resorted to price cuts, offering discounts to retain sourcing agents’ loyalty. Despite these efforts, the higher costs associated with tariffs have encouraged U.S. importers to explore alternative suppliers. This shift has created a strategic opening for other textile-exporting nations to increase their market presence.

Who Stands to Gain the Most?

Several key players have emerged as potential beneficiaries of the trade war:

Vietnam: The Fastest-Growing Textile Exporter

Vietnam has been one of the biggest winners in the U.S.-China trade war. In the first five months of 2024, Vietnam surpassed China as the largest textile exporter to the U.S. The country has capitalized on its well-established supply chain, favorable trade agreements with the U.S., and competitive labor costs. Additionally, Vietnam’s participation in multiple free trade agreements (FTAs) has given it a tariff advantage, making its textiles more attractive to American buyers.

The Vietnamese textile industry benefits from a robust infrastructure, established manufacturing hubs, and a strong reputation for quality. As major global brands shift production out of China, Vietnam has been able to absorb a substantial portion of this redirected demand. However, the country faces challenges such as over-reliance on imported raw materials and increasing labor costs, which could impact long-term competitiveness.

India: A High-Potential Contender with Structural Challenges

India has long been a significant player in the global textile market and sees the U.S.-China trade war as an opportunity to expand its footprint. Indian textile exporters are positioning themselves as an alternative to China, with a focus on offering high-quality fabrics, diverse product ranges, and a well-integrated supply chain.

However, India faces structural hurdles that limit its ability to scale up quickly. These include:

High production costs: Compared to Vietnam and Bangladesh, India has relatively higher wages and operational costs.

Infrastructure bottlenecks: Inefficiencies in logistics and outdated manufacturing processes reduce India’s competitiveness.

Complex trade policies: Bureaucratic hurdles and inconsistent policies have slowed India’s ability to attract large-scale orders from U.S. buyers.


That said, India’s strengths lie in its vast workforce, a strong domestic supply of cotton, and government incentives aimed at boosting textile exports. If India can streamline its policies and improve infrastructure, it has the potential to capture a larger share of the U.S. market in the long run.

Bangladesh: Leveraging Cost Efficiency and Production Scale

Bangladesh, the world’s second-largest apparel exporter, is aggressively positioning itself as an alternative supplier to China. The country offers:

Extremely low labor costs, making it an attractive destination for cost-sensitive buyers.

Mass production capabilities, particularly in ready-made garments (RMG).

Preferential trade access to various markets, including the European Union and Canada.


However, Bangladesh’s dependence on imported raw materials and concerns over labor rights and factory conditions have raised red flags for some international buyers. Additionally, the country’s export portfolio is heavily skewed toward low-value garments, limiting its ability to compete in the high-end textile segment.

Key Factors Determining the Winner

While all three countries—Vietnam, India, and Bangladesh—have opportunities to benefit from the U.S.-China trade war, the extent of their success depends on several factors:

1. Production Costs: Countries with lower labor and operational costs (such as Bangladesh and Vietnam) have a pricing advantage.


2. Trade Agreements: Vietnam’s participation in FTAs like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) gives it a competitive edge.


3. Supply Chain Strength: India has an advantage in raw material availability, but infrastructure and policy challenges need to be addressed.

4. Diversification of Products: Countries with a broader range of textile products (such as India) can cater to diverse market needs.

5. Political and Economic Stability: Foreign buyers prefer stable business environments, making governance and policy consistency critical.

Vietnam Leads, India Has Potential, Bangladesh Holds Strong

Among the three contenders, Vietnam appears to be the biggest winner in the short term, having already overtaken China in U.S. textile exports. India, with the right policy push and infrastructural improvements, has the potential to become a formidable competitor in the long run. Meanwhile, Bangladesh remains a strong contender, particularly in the low-cost apparel segment.

Ultimately, the ability of these countries to sustain their gains will depend on how effectively they address industry challenges, improve efficiency, and align with evolving U.S. trade policies. As global supply chains continue to shift, the textile industry will remain a critical battleground in the ongoing U.S.-China economic rivalry.