Vietnam’s wood industry concerned about Trump tax policy risks: association

One of the major concerns of Vietnam's wood industry is the reaction of the U.S. market to the Trump administration's possible tax policy after a year of strong growth, said Nguyen Chanh Phuong, vice chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA).

Phuong was speaking at the event "Green transformation: From pressure to business opportunities" in Ho Chi Minh City on Wednesday.

According to Phuong, in the short term, the wood industry still faces challenges related to tax policies and import regulations. However, when these issues are gradually stabilized, sustainable development will become a mandatory requirement for all businesses that want to maintain their position in the global supply chain.

The wood industry has been a pioneer in the green transformation process from a very early stage. Since 2018, the industry has actively integrated sustainable development criteria into its overall strategy, especially in the agriculture and forestry sectors.

In 2024, the wood industry achieved impressive growth with sales of $16.3 billion, an increase of nearly 21% compared to 2023.

In the context of a slight recovery in global purchasing power, the industry's internal strength was still maintained quite well, according to Phuong. Notably, the U.S market accounted for about 55% of total export turnover, while Europe- one of Vietnam's main markets - reached about $1.2 billion, accounting for 7.3%.

However, Europe is a region with very strict sustainable development policies, requiring businesses to meet many strict standards. It is expected that the end of 2025 is the time when large enterprises will be most affected, while small and medium enterprises will face stricter compliance requirements from 2026.

The U.S. also has a similar policy, but the level is not as strict as the EU. However, thanks to proactively developing sustainable policies early on, the Vietnamese wood industry has passed the first tests, and most businesses are ready to face these challenges, he added.

Vietnam has also maintained a long-standing anti-deforestation policy, with a commitment to stability and sustainability. What special is that the tighter the anti-deforestation regulations, the more opportunities the wood industry has to develop strongly.

"This is an interesting point, showing that when businesses comply with green standards, the value and reputation of Vietnamese wood products in the international market are also enhanced," Phuong stressed.

Despite many advantages, the wood industry still faces many difficulties. Most wood materials are grown on a large scale but have not participated deeply in supply chain management. The wood industry cannot develop alone but must be in a closely linked chain, from forest planting and exploitation to production and distribution, Phuong said.

According to Phuong, nowadays, instead of focusing only on wood, many businesses have turned to exploiting other natural materials such as rattan, bamboo, leaves, and lacquerware - materials that are handcrafted in many regions across the country.

However, tracing the origin of these products faces many challenges. Issues related to internal management, taxes, tax refunds, and origin certification processes are still difficult, creating a lack of consistency in the supply chain.

In addition, the wood and handicraft industry, although having great potential for development, still faces many barriers. "One of the most important challenges is how to demonstrate the sustainability and environmental friendliness of products in the global supply chain. This is not a simple task, requiring careful preparation from businesses," Phuong added.

Since Trump became President of the U.S. for the second time, the US has not imposed tariffs on any Vietnamese wood products. However, speaking to the press on Wednesday, President Trump said he is considering a plan to expand the scope of tariffs on lumber and forest products. The tax rate he is considering is 25% and will take effect from April 2, 2025, similar to the tariffs on drugs, cars and semiconductors, according to Vietnam Trade Office, the Embassy of Vietnam in the United States.