'Golden' opportunity for Vietnam’s wood, shrimp industries after 20% reciprocal tariff

While the U.S.'s 20% reciprocal tariff presents new challenges, Vietnam’s wood and shrimp industries still see major opportunities if businesses can adapt and take advantage.

On April 2, the U.S. announced a 46% reciprocal tax on Vietnamese exports. Following several rounds of negotiations, the rate was reduced to 20%, effective July 7 - slightly higher than the 19% levied on some other Southeast Asian countries.

According to Vu Kim Hanh, chairwoman of the High-Quality Vietnamese Goods Business Association, the new tariff regime opens a “golden opportunity” for Vietnam’s wood sector.

Vietnam currently records $17 billion in annual wood exports, ranking sixth worldwide. In the U.S. market, Vietnam has long stood in second place behind China. However, as of July 2025, Vietnam has risen to the top spot because Chinese wood products have been blocked from entering the U.S.

Hanh stressed the need to redefine Vietnam’s wood export image. For years, the industry has faced accusations of deforestation. In reality, all Vietnamese wood exports are subject to strict controls, requiring certification from plantation forests or legally imported sources.

With China sidelined, Vietnam’s challenge is to seize this “heaven-sent” advantage by restructuring its supply chain to be more efficient, dynamic, and consumer-focused.

“Chinese businesses have long anticipated the trade war and moved infrastructure, supply chains, and marketing capabilities into the U.S. Vietnam cannot afford to stand still,” Hanh noted.

Shrimp sector: Stable ground, new prospects

For shrimp, the new tariff is comparable to that imposed on competitors, which allows Vietnam to maintain its processed shrimp market share in the U.S., according to Ho Quoc Luc, chairman of Sao Ta Foods JSC. He added that if India’s 50% tariff remains unchanged, Vietnam could even expand its U.S. market presence.

However, risks remain. A recent lawsuit involving Stapimex, a mandatory respondent in U.S. Department of Commerce proceedings, could pose challenges if documentation is deemed insufficient. To mitigate risks, Sao Ta is expediting shipments to U.S. ports before the tax deadline of October 5 while also diversifying into other markets.

Spices: Quality is key

Nguyen Trung Dung, founder and CEO of Dh Foods, said his company has focused more on cross-border e-commerce through Amazon than direct U.S. exports. Survey results show Vietnamese spices remain competitive against products from China, India, and Thailand, even after factoring in taxes and logistics.

Dung emphasized that Vietnamese spice producers must raise quality standards to win over American consumers, particularly small and mid-sized businesses.

Beyond wood: Handicrafts and new materials

Alongside wood exports, Vietnam’s handicraft industry is also benefiting from innovation. Hanh highlighted elephant grass as a promising new raw material. Traditional inputs like rattan, sedge, and water hyacinth are depleting, but elephant grass grows naturally, tolerates salinity, and requires no fertilizer or pesticides.

Handicrafts made from this resilient material have already found success in major U.S. retail chains such as Walmart and Home Depot, as well as on Amazon’s e-commerce platform.

A turning point

With China restricted from the U.S. market, Vietnam’s wood industry is well positioned but must strengthen post-production value creation - particularly in modern design and customer insight - to sustain its new lead. For shrimp and spices, steady tariffs and shifting global trade conditions create both opportunities and risks.

The message from industry leaders is clear: Vietnam has been handed a rare opening. The challenge now is to transform it into lasting growth.