One of the world’s largest furniture producers—Vietnam—has warned that Trump’s new tariffs, which will slap a 46% tariff on products, risk causing the USD 137 billion industry to collapse. That is according to a group of Vietnamese manufacturers who spoke to the Wall Street Journal (WSJ) over the weekend.
As it stands, Vietnam is the United States’ largest market for furniture production, making it, after China and Mexico, the United States’ largest trade deficit partner. And whilst Wood Central understands that large quantities of timber used in furniture are exempt from the current tariffs, vast volumes of acacia wood are now tied up in a new national security probe run by US Secretary of Commerce Howard Lutnick.
At a factory in northern Vietnam, Christina Chen, a director of a large Vietnamese manufacturer, told the WSJ that she had spent so much time renegotiating orders with US buyers that she developed a sore throat:
“Everybody knows the volume is going to crash. European buyers are already flooded with offers from Chinese competitors (the world’s largest producer of furniture), making it difficult for Vietnamese producers to redirect output.”
Christina Chen, a director of a large Vietnamese manufacturer, spoke to the WSJ over the weekend.
Why Vietnamese furniture is key to the global supply of timber products
Last week, Wood Central spoke to Rudolf van Rensburg, director of Margules Groome Consulting, who published the analysis, Tariff Shockwaves: The Global Reordering of Log and Wood Products Trade.
“As it stands, Vietnam is the world’s second-largest exporter of wood furniture—after China—and its industry depends heavily on imported wood raw materials from all over the world,” according to Mr van Rensburg, pointing to the analysis. “Annually, Vietnam imports 4 to 5 million cubic metres (roundwood equivalent) of logs and sawn timber. In 2022, total wood raw material imports reached USD 2.62 billion, with sawn timber accounting for roughly 40% (USD 1.05 billion).”
“More than 80% of Vietnam’s imported timber is used to produce furniture and interior wood products. As such, the country has become a global hub for processing and adding value to imported wood before re-exporting it,” the analysis said, arguing that the tariffs could significantly disrupt this model, making it hugely vulnerable to a shift in trade policy.
“If Vietnamese exports face new duties or upstream supply chains are affected by tariffs on lumber from key source countries, manufacturers may see increased costs and reduced competitiveness. These cascading effects could lead to input shortages, higher prices, and changes in forced sourcing and production strategies.”
- To learn more about the impact of the United States’ “liberation tariffs” on the global supply chain for timber products, raw, secondary and manufactured, click here for Wood Central’s special feature from Friday.
