Vietnamese wood companies should introduce more product lines to existing markets to avoid “putting all eggs in one basket,” said Phung Quoc Man, chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA).

For example, exports to Japan should not be limited to woodchips and pellets, Man added while speaking at the talk show “20% reciprocal tariff – specific impacts and business responses” held last Saturday in Ho Chi Minh City.

He explained that the industry’s first reaction to the new tariffs was “shock,” with orders declining. However, companies quickly adapted by expediting shipments during the tax grace period.

Since the tariffs took effect, supply chain stability has been maintained by sharing the tax burden among producers, importers, and retailers. As a result, wood exports in the first seven months still grew 7.6%, with shipments to the U.S. up 11.6% - a sign of the industry’s strong resilience.

In the long run, solutions include diversifying markets, improving management capacity, and cutting costs.

To reduce risks, firms will expand their offerings to existing destinations: Japan will import more than just woodchips and pellets, South Korea more than just engineered wood, and Europe more than just outdoor furniture.

Can Van Luc, a member of the Prime Minister’s Economic Advisory Council and chief economist at state-controlled BIDV bank, pointed out that four out of 10 kitchen products in the U.S. now come from Vietnam.

Amid current shifts, many Chinese firms are acquiring Vietnamese wood companies to continue production with the existing workforce, while some major Vietnamese exporters are expanding investments abroad, including in the U.S. and Colombia.

According to the import-export department under the Ministry of Industry and Trade, steady growth in the U.S. market not only reflects a recovery in consumer demand for furniture but also shows how Vietnamese companies are proactively adapting to tariff barriers and increasingly strict buyer requirements.

Source: The Investor