Why sneaker production is shifting from China to Vietnam

Why sneaker production is shifting from China to Vietnam (File image)

For decades, China dominated sneaker manufacturing with its vast workforce, low costs, and unmatched infrastructure. But Vietnam has now emerged as the leading source of sneakers for brands like Nike, Adidas, Puma, and Brooks. Factories around Ho Chi Minh City produce soles, insoles, laces, and uppers before exporting finished shoes worldwide, overtaking China’s role as the world’s sneaker workshop, the New York Times reported.

Trade tensions and tariff impacts

The shift became more visible after President Trump threatened Vietnam with a 46 percent tariff earlier this year, later reduced to 20 percent under a trade pact. The uncertainty shook global markets, sending Nike and Adidas stock tumbling. Companies now face tough decisions—scale down production in China, continue relying on Vietnam, or diversify further to reduce tariff risks and overdependence on a single country.

How Vietnam built sneaker dominance

Vietnam’s sneaker rise began in the 2000s when China’s labour costs increased and copycat production hurt foreign companies. With a young workforce and a government open to foreign investment, Vietnam quickly attracted South Korean and Taiwanese manufacturers who once relied on China. By the mid-2010s, Vietnam had become a trusted partner for global sneaker brands, especially as companies sought to hedge against China’s rising wages and trade friction.

The Covid-19 turning point

The biggest acceleration came in 2020, when China closed its borders during the pandemic. Supply chains froze, exposing the risks of overreliance on China. Brands quickly moved production lines to Vietnam, where localized supply chains already existed. Companies like Jones & Vining, which makes lasts, insoles, and footbeds, scaled up production in Vietnam, supplying 70 percent of their output directly to nearby factories.

A supply chain less dependent on China

Unlike other industries, sneaker production is now less reliant on China. Vietnam produces most components locally, though some raw materials still come from Chinese suppliers. U.S. officials remain wary of “transshipment,” where Chinese goods are routed through Vietnam to avoid tariffs. Washington has signalled tariffs as high as 40 percent on such goods, leaving manufacturers in a state of uncertainty.

Factories fuelling local transformation

For many Vietnamese workers, sneaker factories have been life-changing. Workers like Pham Kieu Diem, who joined a Nike supplier in 1995, recall how rice fields were replaced by industrial zones. Her factory job helped her and her sisters save enough money to buy land and build a home. Today, thousands of trucks line highways from shoe factories to ports, a testament to Vietnam’s new role in global manufacturing.

The future of sneaker production

While Vietnam has surpassed China in sneaker exports, risks remain. Tariffs, rising labour costs, and heavy dependence on a single country could push companies to diversify further into nations like Indonesia, India, or even back to Mexico. For now, Vietnam’s young workforce, established supply chain, and pro-investment policies keep it at the centre of the sneaker industry’s future.