The US remains one of the four biggest export markets for Vietnam
There has been no official report on the possible impact on Vietnam’s woodwork exports after the US decided to impose new tariffs on Chinese products.
The US remains one of the four biggest export markets for Vietnam, importing 77.5% of Vietnam’s total woodwork export value in the first five months of the year.
Chair of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) Nguyen Quoc Khanh said this was a ‘modest figure’. He said the situation will be different in the near future if Vietnamese manufacturers make big investments.
The higher demand in the world market, plus the appreciation of the dollar, both create golden opportunities to Vietnamese enterprises to boost production and exports.
According to the Ministry of Agriculture and Rural Development (MARD), wood and woodwork exports to the US in the first five months of the year reached US$1.36 billion, an increase of 11.5% over the same period last year.
However, analysts warned that material shortage will hinder woodwork exports. The demand for legal timber (which has origin certificates) soared as some large wooden furniture manufacturers have large contracts on designing and installing important works in the world.
The trade in the world market is becoming bustling due to the short supply, US protectionism and retaliation measures taken by US partners.
The tropical timber imported by the EU has seen the price increase in the last six months because European importers have to compete with US plywood importers. Canada responded to the US policy on taxing plywood and wooden chairs on July 1.
The trade policy pursued by the Trump administration aims to reduce the trade deficit and encourage domestic production. The US federal government has been tightening the implementation of the Lacey Act.
The US trade deficit of US$32 billion a year in US trade with Vietnam makes Vietnam one of six countries which have the biggest trade surplus with the US.
The US trade deficit in wooden furniture alone is worth over US$2 billion. The high surplus, together with the big Chinese investment in Vietnam’s wood processing industry, may trigger more attention by US management agencies.
Vietnam’s wood processing industry has been developing strongly in recent years, but it has been warned of difficulties caused by changes in export markets, especially the four most important markets, including the US.
In 2017, Vietnam spent US$2.1 billion to import timber.