U.S retaliatory on Vietnam wood export and solution in 2025

I/ What is U.S Retaliatory?

U.S. retaliatory tariffs are a trade policy tool employed by the United States, particularly under the influence of its economic nationalism. These tariffs are imposed in response to what the U.S. perceives as unfair trade practices by other countries. Donald Trump, a businessman-turned-politician, viewed every policy decision through the lens of fairness and mutual benefit (a win-win approach). As a result, he adopted this measure as a negotiation leverage to restore and revitalize the U.S. economy.

II/ U.S. Retaliatory Tariffs on Vietnam

On April 3, 2025, the United States officially imposed retaliatory tariffs of up to 46% on imports from Vietnam. This move is not only a major shock to Vietnam’s export-driven economy, but also a wake-up call for the Vietnamese wood industry – one of the country’s key export sectors.

To better understand why these U.S. tariffs have such a significant impact and explore potential strategic responses for Vietnam’s wood industry during this challenging period, let’s dive deeper with Biomass below.

III/ The U.S. – Vietnam’s Largest Wood Export Market

According to 2024 statistics, the United States accounted for 66.4% of Vietnam’s total wood export turnover, equivalent to USD 8.8 billion. China ranked second with USD 1.2 billion (9.0%), followed by other major markets such as Japan, South Korea, Canada, the United Kingdom, and others.

Pie Chart 1: Vietnam’s Wood Export Share by Market – 2024

Overdependence on the U.S. Market Exposes Vietnam’s Wood Industry to High Risk

Vietnam’s heavy reliance on the U.S. market makes its wood industry highly vulnerable to sudden shifts in trade policy. With the abrupt imposition of a 46% tariff on Vietnamese wood products, the entire supply chain, from manufacturing to distribution, is experiencing cascading disruptions.

IV/ Severe Impacts of U.S. Tariffs on Vietnam’s Wood Industry

The 46% tariff poses serious challenges for Vietnamese wood exporters, including:

• Losing market share to competitors from other countries.

• Significant revenue losses, potentially leading to bankruptcy if businesses fail to adapt quickly.

• Mass order cancellations from U.S. partners.

Forecasts indicate that if the tariff remains in effect, Vietnam’s wood exports could decline by as much as 40% in the second half of 2025, putting thousands of businesses and workers at risk of economic hardship.

V/ Don’t Put All Your Eggs in One Basket” – The Urgent Need for Market Diversification

Although the U.S. remains Vietnam’s largest export destination, continued reliance on a single market is unsustainable. This situation serves as a wake-up call for Vietnam to adopt more balanced and forward-looking trade policies.

Vietnam must rapidly expand its reach to alternative markets such as Japan, South Korea, India, and neighboring countries. At the same time, domestic consumption should be boosted to strengthen internal demand. Improving competitive capabilities will also enable Vietnamese wood products to penetrate more demanding markets. A wider market footprint enhances business agility and reduces exposure to external shocks. In fact, market diversification is a risk mitigation strategy that prevents a potential domino effect in the event of sudden policy shifts.

However, challenges remain. China—Vietnam’s second-largest wood export market—is already subject to a punitive 158% U.S. tariff, and other markets in Asia and Europe are imposing duties ranging from 10% to 20%.

VI/ Sustainable Solutions for Vietnam’s Wood Industry

To weather this economic storm, the Vietnamese wood industry must go beyond temporary reactions and undergo a strategic transformation for long-term resilience.

1. Industry Restructuring – Investment in Deep Processing Technologies

Improving product quality, fostering product diversification, and shifting towards value-added goods are now more critical than ever. This requires targeted investments in advanced technologies such as:

• UV coating systems

• Hot-pressing techniques

• Automation and CNC cutting

• Surface finishing innovations

Additionally, enhancing product aesthetics and uniqueness through wood coatings and decorative techniques (e.g., engraving, carving) can boost the market appeal. Developing high-end, finely crafted wooden products under recognized Vietnamese brands will position the country higher in the global value chain and attract premium markets.

2. Transparency in transparency in raw materials sourcing.

Increasing transparency in raw material sourcing significantly enhances product credibility and strengthens consumer trust. To achieve this, enterprises must ensure full traceability of inputs and commit to using legally harvested timber. Moreover, promoting internationally recognized certifications for sustainability and safety is essential.

Key certifications such as FSC (Forest Stewardship Council), Lacey Act compliance, and EUTR (EU Timber Regulation) not only help exporters avoid additional tariffs but also act as strategic tools to differentiate their products in global markets. These certifications are no longer optional—they are vital compliance standards and a powerful competitive advantage for building long-term trust with international customers.

3. Wood Coatings – A Strategic Lever to Boost Export Value

One critical yet often overlooked factor in wood product exports is the quality of wood coatings. High-performance wood coatings do not merely serve as surface protection; they extend the product’s durability, enhance moisture resistance, prevent scratches, and preserve color integrity over time. Furthermore, premium finishes elevate the aesthetic value, making wooden products more appealing to discerning markets with strict import standards.

Equally important is the selection of coatings that meet both chemical safety and physical performance criteria. For example, choosing low-VOC, non-toxic, and user-friendly water-based coatings ensures consumer safety while aligning with global sustainability trends.

Biomass is proud to be a Vietnamese brand specializing in water-based wood coatings that meet internationally recognized standards such as Greenguard Gold, EN71-3, and REACH. These certifications affirm our commitment to family-safe, eco-conscious products. Using export-compliant coatings is a key strategy for Vietnamese wooden goods to not only overcome technical trade barriers, but also to penetrate premium segments in the global marketplace.

4.Trade Negotiation and Policy Support – The Role of the Government

The Vietnamese government must take proactive steps in initiating bilateral trade negotiations with the United States. Through diplomacy, a more balanced resolution could be reached—such as tax reduction or even elimination of punitive tariffs.

In parallel, enterprises should stay up to date with changes in tariff policies and develop contingency plans. This preparation will enable businesses to respond swiftly to future trade disruptions.

Moreover, financial and credit support is crucial. Targeted government programs aimed at small and medium-sized enterprises (SMEs) can offer the lifeline needed to weather this crisis. Clear and timely support policies will help guide and stabilize vulnerable businesses through turbulent times.

VII/ Biomass – A Trusted Partner for Vietnam’s Wood Industry

Challenges test resilience—and the Vietnamese wood industry, with its long-standing spirit of perseverance and innovation, is poised to rise stronger than ever.

Biomass is proud to stand alongside wood manufacturers, offering safe and high-performance export-grade wood coating solutions. Our mission is not only to help Vietnamese products navigate tariff barriers, but also to elevate them to global standards.

“Quality – Safety – Sustainability” – This is the guiding principle that Biochem follows in every drop of paint.