Navigating Challenges in Vietnam’s Wood and Furniture Exports
Introduction to Recent Tariffs
On September 25, the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) shared startling news for Vietnamese exporters. US President Donald Trump announced hefty tariffs of up to 50% on essential products, including kitchen and bathroom cabinets, effective October 1. This sudden policy shift poses a significant obstacle for Vietnam, which relies heavily on the US as its primary export market for wood and furniture. In the face of these challenges, Vietnamese enterprises are rapidly exploring new strategies to safeguard and promote growth.
Exploring New Markets: The Case of Canada
With the US imposing such tariffs, Canada has surfaced as a promising alternative market for Vietnamese wood products. Vietnam is now one of the top three suppliers of wood to Canada, and the demand from Canadian buyers is particularly strong for bedroom furniture, which captures over 35% of the market share. This success can be attributed to the high quality of Vietnamese products and their alignment with current consumer trends favoring sustainable, minimalist, and eco-friendly designs.
Sustainability as a Competitive Edge
Recognizing the importance of sustainability, the Ministry of Industry and Trade (MoIT) has encouraged Vietnamese businesses to focus on producing Forest Stewardship Council (FSC)-certified products. This certification not only aligns with Canadian sustainability standards but also enhances the appeal of Vietnamese goods. To effectively compete in the Canadian market, exporters must also adhere to strict guidelines on safety, durability, and fire resistance.
Leveraging Trade Agreements
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has emerged as an essential tool for Vietnamese exporters. This agreement provides tariff advantages that can enhance the competitiveness of Vietnamese products in foreign markets, particularly in Canada. By taking full advantage of these free trade agreements, businesses can significantly offset the challenges posed by tariffs and other trade barriers.
Canada’s Demand for Imports
Interestingly, Canada’s own timber industry produces about 600 million cubic meters annually yet meets only half of its domestic demand for furniture. This gap presents a lucrative opportunity for Vietnam to bridge the shortfall with competitively priced imports. As Canadian consumers continue to seek quality furniture, Vietnam is well-positioned to fulfill this demand.
Strategies for Growth
HAWA Chairman Phung Quoc Man has emphasized the need for Vietnamese enterprises to innovate and adapt swiftly. As opposed to the US market, others have not yet implemented tariffs on Vietnamese wood products. Man encourages businesses to utilize free trade agreements fully, enhance their design capabilities, and expand their online sales channels. The data supports this strategy: in the first eight months of 2025, Vietnam’s wood and wood product exports rose by 6.5% year on year, amounting to $11.1 billion.
Addressing Challenges Ahead
Despite these positive statistics, the final quarter of the year poses its own set of challenges for the Vietnamese wood industry. With market diversification and a stronger focus on domestic demand being crucial for long-term stability, businesses are tasked with re-evaluating their strategies to ensure continued growth.
Ongoing Talks with the US
Nguyen Cam Trang, Deputy Director of the MoIT’s Import-Export Department, highlighted the ministry’s ongoing technical negotiations with the US concerning transshipment issues. The lack of clear definitions and guidelines makes this a complex endeavor. Meanwhile, Vietnamese businesses are urged to leverage free trade agreements and broaden their export channels to maintain growth momentum in uncertain economic times.
As Vietnam navigates this turbulent period in the wood and furniture sector, the focus on market diversification, sustainability, and innovative strategies will determine the industry’s resilience and success in the coming years.