In Vietnam’s bustling markets, where imitation luxury fashion was once sold in the open with cheerful transparency, the silence of shuttered shops now echoes the country’s growing economic anxiety. The United States, Vietnam’s top export destination, has accused the Southeast Asian nation of being a global hub for counterfeit goods, triggering a crackdown that’s sending shockwaves through Vietnam’s informal economy and daily life.
The shift has been particularly felt by people like Tran Le Chi, a betting agent in Hanoi’s backstreets. Chi used to refresh her wardrobe regularly with fake Chanel T-shirts, Louis Vuitton handbags, and oversized Gucci sunglasses, all purchased cheaply from Hanoi’s night markets and Ho Chi Minh City’s bustling Saigon Square. But those days are gone.
“I haven’t been able to find my favourite styles for weeks,” she said, glancing at her worn imitation Givenchy bag. “The clothes help me look trendy. Why would I care if they are fake or not?”
Like many Vietnamese consumers, Chi represents a growing class of image-conscious, middle- and lower-income citizens who rely on counterfeit luxury items to project aspirational identities. The economic rationale is straightforward: “Only the super-rich people can afford the real ones,” she adds. “They’re not for people like us.”
But her access to these items — and the livelihoods of countless small vendors and suppliers — is now jeopardized by a high-stakes trade dispute.
The US Trade Representative (USTR) in January 2025 released a searing report implicating Vietnam in the continued proliferation of counterfeit luxury goods. It identified several Vietnamese markets — notably the Saigon Square mall — as epicenters of illegal trade in knock-off Rolex watches, handbags, wallets, and jewelry.
While the report acknowledged steps taken by the Vietnamese government, it criticized the “low penalties” that failed to deter offenders. “Counterfeit products remain rampant,” it concluded, warning of retaliatory trade measures.
One of the most serious threats is a 46% tariff on Vietnamese exports, a move pushed by the Trump administration to punish both the surge in counterfeit goods and what it called “Vietnam’s role in circumventing China tariffs.”
In response, Hanoi has launched a visible and aggressive campaign to clean up its act.
The results of this pressure are now plain to see. In Hanoi’s Old Quarter, rows of once-vibrant fashion stalls now stand closed. In Ho Chi Minh City, shopkeepers at Saigon Square have watched law enforcement storm the complex, seizing thousands of fake goods.
One vendor, known by the pseudonym Hoa, has sold imitation Nike and North Face apparel for over a decade. “Most of the products came from China,” she said, “but we added ‘Made in Vietnam’ labels. Customers know they’re fake, but it makes them feel better.”
Her shop has been closed for nearly two weeks.
“I’ve never cheated anyone,” she insists. “My clients can’t afford the real thing. They come here so they can look good too.”
But the law is closing in. Authorities are no longer turning a blind eye. Nguyen Thanh Nam, deputy head of the domestic market surveillance agency, said last week that over 7,000 cases of counterfeit sales were uncovered in the first five months of 2025, with a market value exceeding $8 million.
“We found over 1,000 fake Rolex watches in just one raid at Saigon Square,” he added.
Elsewhere, piles of counterfeit cosmetics, vitamins, sweets, and electronics have been discovered in Hanoi, Danang, and the outskirts of Ho Chi Minh City. Officers have also confiscated fake Marshall speakers, Apple smartwatches, and other gadgets, many suspected of having Chinese origins.
Vietnam is not just a manufacturer — it’s also a transshipment hub. According to 2024 trade data, Vietnam was Southeast Asia’s largest importer of Chinese goods, purchasing $161.9 billion worth that year. US officials argue that Vietnam has become a channel for Chinese goods to enter the US market disguised as Vietnamese exports, thereby evading US tariffs imposed on China.
The Vietnamese government disputes the accusation but responded in April with a directive aimed at tightening controls on certificates of origin. The Ministry of Public Security followed with a three-month crackdown on counterfeit manufacturing and trade, which will continue until mid-August.
At stake is not only Vietnam’s status as a reliable trade partner, but also billions in export revenue. The United States remains Vietnam’s largest customer, importing electronics, textiles, and footwear.
Counterfeit goods in Vietnam are not merely black-market commodities — they are deeply woven into everyday life.
From university students to street food vendors, knock-off fashion is ubiquitous. A Louis Vuitton bag or a Supreme hoodie — even fake — signals status in a society where economic inequality is rising despite rapid growth. It is estimated that up to 30% of luxury goods sold in Vietnamese urban centers are counterfeits.
“Vietnam has a dual economy,” said Nguyen Khac Giang, a visiting fellow at the ISEAS-Yusof Ishak Institute. “There’s the formal export economy that makes shoes for Nike and bags for Coach, and then there’s the informal one that sells almost the same things, but unlicensed.”
For many vendors, these distinctions blur. Vietnamese factories sometimes overproduce or “leak” goods after official hours, supplying the local black market with items nearly indistinguishable from the real thing.
“This is not always about illegal factories deep in the jungle,” Giang added. “Sometimes, it’s about a legitimate manufacturer making an unofficial third shift.”
With the government now enforcing stricter regulations, some fear that livelihoods are being lost in a bid to win US favor.
News outlets, multiple shopkeepers expressed resentment. Some compared the crackdown to past campaigns against street hawkers — initiatives that removed what the state considered “urban disorder” but which critics called an attack on the poor.
Lan, another clothing vendor, said her family relied on income from a small store that sold replica Adidas shoes and Zara-style clothing.
“I make maybe $10 a day in profit. Now that’s gone,” she said. “They say it’s for the country’s image. What about our image — the poor’s image?”
Indeed, the crackdown exposes a deeper economic fragility. While Vietnam has been hailed as a rising Asian manufacturing star, the informal economy still constitutes nearly 20% of GDP, according to World Bank estimates. Tens of thousands of small retailers, market sellers, and grey-market workers operate outside official oversight.
Shutting them down has ripple effects far beyond downtown shopping centers.
Vietnam’s leaders must now walk a tightrope: appeasing American pressure while preserving social stability and protecting domestic livelihoods. With a historically delicate position between China and the US, Vietnam has often tried to present itself as a neutral and dependable partner.
But the counterfeit issue complicates that image.
“Vietnam wants to be seen as a responsible actor in the global trading system,” Giang said. “The crackdown is part of a broader effort to clean up and formalize. But there are political optics as well. The message to Washington is: We hear you.”
Still, Trump-era trade tactics — especially the threat of a blanket 46% tariff — have drawn criticism even within American trade circles. Experts warn it could undercut Vietnam’s economic progress and destabilize a vital manufacturing hub at a time when Western firms are increasingly looking for China alternatives.
As the three-month crackdown unfolds, it remains to be seen whether Vietnam’s efforts will be enough to stave off harsh US tariffs.
In the meantime, communities that once thrived in the counterfeit economy are experiencing an unfamiliar silence.
At Saigon Square, once brimming with eager tourists and young locals eager for a bargain, there is now a kind of tense emptiness. Some shopkeepers, like Hoa, remain hopeful. Others talk about moving their businesses online or shifting to “real” but low-cost local brands.
“Everything is changing,” Hoa said. “Maybe it’s good. Maybe not. I just need to survive.”
For everyday Vietnamese like Chi, though, the loss is both practical and personal.
“We don’t steal,” she said. “We just pretend. Is that such a big crime?”
Vietnam’s struggle with counterfeit goods is more than a trade issue — it’s a window into a country undergoing seismic change. As global pressures mount and consumer aspirations collide with harsh economic realities, the story of counterfeit Chanel bags and fake Rolex watches becomes a metaphor for the broader challenges of globalization.
