KUCHING: Vietnamese wood-product manufacturers are bracing for deeper trouble as US trade tariffs begin to bite, with further hikes expected soon, according to the International Tropical Timber Organisation (ITTO).
The ITTO, in its latest tropical timber market report, said the new import levies have pushed the Vietnamese wood industry into a difficult position, driving up costs, squeezing earnings and threatening the sector’s ability to sustain exports to key markets.
“The US has imposed high taxes on a variety of imported wood and furniture products, and is anticipated to rise further in early 2026. In particular, kitchen cabinets, bathroom cabinets and associated goods will be subject to tariffs of up to 50 per cent starting in early 2026 — a significant rise from the initial 25 per cent rate.
“A 25 per cent tariff on upholstered furniture (sofas, upholstered chairs, etc) went into effect on October 14, and may rise to roughly 30 per cent by the start of 2026,” the report stated.
The higher duties have made Vietnamese products less competitive than both US-made items and imports from tax-exempt countries. ITTO said US buyers reacted immediately after the tariff announcement, with many reducing or cancelling orders — a sharp blow to export manufacturers, particularly those in upholstered furniture.
“Foreign Direct Investment (FDI) companies with factories in Vietnam are also concerned about shrinking profit margins as they will have to reduce prices to preserve market share and split tax expenses with partners.”
Although plywood is not included in the new import levies, it remains under a US anti-dumping investigation, with findings expected by end-2025. Should duties be imposed, total charges could reach 20 per cent.
Vietnam’s wood and wood-product exports stood at an estimated US$11.24 billion in the first nine months of 2025, with wood-product exports at US$8.5 billion, up 5 per cent year-on-year. But a slowdown since August signals weakening global demand. ITTO noted that this trend will pressure Vietnam’s 2025 export target of US$18 billion.
Experts have urged manufacturers to diversify export destinations, cut production costs and seek state assistance, including reduced land rent, lower social-insurance obligations and logistics support. They also recommend longer-term expansion into Europe and the Middle East, where demand for hotel, resort and premium residential furniture remains strong.
Handicraft and Wood Industry Association of HCM City (Hawa) chairman Phung Quoc Man said Vietnam’s wood sector has grown from less than US$200 million in exports in 1999 to an expected US$20 billion by 2025.
He said Vietnam is now the world’s second-largest exporter of wooden furniture. “The industry has built a relatively complete supply chain, from raw materials and production to distribution, creating a strong global, competitive advantage,” he said at the “HCM City’s Wood and Furniture Export Industry — a Global Manufacturing and Export Hub” seminar.
HCM City is positioned to become one of the world’s major furniture manufacturing and export hubs as global markets recover and demand for green, sustainable products rises. The recent administrative merger of Hawa and the Binh Duong Furniture Association (Bifa) strengthens this push, giving Hawa nearly 1,000 member companies, 70 per cent of them producers and exporters.
Hawa senior adviser and AA Corporation chairman Nguyen Quoc Khanh said that with the right strategy, HCM City could reach US$15 billion in exports by 2035, with 80 per cent of products meeting green standards and operating within a smart, integrated industrial-logistics ecosystem.
Bifa chairman Nguyen Liem said the industry must commit to both environmental and digital transformation. “The green transition helps save energy, reduce emissions and encourage the use of legal, eco-friendly materials that meet international standards.
“Digital transformation, meanwhile, ensure transparent management, enables production data measurement, optimises supply chains and improve demand forecasting. The two processes are closely liked and go hand in hand.”
Nguyen, who is also vice-chairman of the Vietnam Timber and Forest Product Association, proposed the creation of a “green and digital transformation support centre” in HCM City to pilot low-emission factories and shared-infrastructure industrial clusters, helping smaller firms transition affordably.
