Page 32 - FDMAsia MayJun 2025

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Needpix.com is backed by its own production system and shifting to new
markets involves more than just trade promotion or finding
new orders.
It also requires significant financial investment in production

lines.
Tran Quoc Bao, from Thien Loc Import-Export Company
remarked that, while switching markets is a sound strategy,
it is not easily executed.
The US currently accounts for nearly 70 percent of Vietnam’s
total wood export value. Only about 10 percent of businesses
are capable of shifting to alternative markets.
In 2024, wood exports to the US brought in US$604 million “A 10 percent tax rate is bearable if both sides share the
and accounted for 35 percent of the province’s total trade. risk equally, but any higher rate could force factories to shut

Following the news of potential reciprocal duties some down. We may have to consider switching production to serve
US customers have asked to renegotiate existing orders and domestic consumption in order to maintain stable livelihoods
temporarily suspended the signing of new contracts. for over 100 workers,” Bao explained.
Similarly, Bac Kan Province has 22 export enterprises. Several localities are currently implementing plans to work
Two of these export directly to the US which accounts for with export companies on solutions to boost trade promotion
55 percent of their total output. and expand market access to the EU, Japan, South Korea
A report assessing the impact on Bac Kan’s export and Southeast Asia.

businesses to the US indicates that if a 46 percent reciprocal At the same time, they are helping businesses access
duty were applied it would have a direct effect not only on capital to maintain production and expand domestic sales.
those companies exporting to the US but also on businesses Many have proposed that the government adopt both
involved in the export supply chain. immediate and long-term comprehensive measures to support
The industrial growth rate in Bac Kan is forecast to fall businesses with legal procedures, trade defence investigation
by around 1–2 percent in 2025 with wood export revenue dossiers in English (as required by the US) and strengthen
declining by US$8–10 million. Some companies may be forced support for provincial enterprises in promoting exports to
to reduce their workforce which could affect local social welfare. alternative markets.
According to Dinh Lam Sang, Deputy Director of the Bac Ngo Sy Hoai, Vice Chairman and Secretary-General of the

Kan Department of Industry and Trade, the 90-day suspension Vietnam Timber and Forest Products Association, noted that
of tariff imposition by the US provides opportunities for Vietnamese exports to Japan have traditionally consisted of
businesses to have more time to adjust their operations and wood chips and some types of panel products.
prepare response measures. Given the current pressure from the US Vietnamese wood
It is also a valuable opportunity to lay the groundwork enterprises should now explore the potential to export indoor
for negotiating long-term trade agreements and for seeking furniture suitable to Japanese consumer preferences.
to diversify export markets. As for China, with its population of 1.4 billion, Vietnam’s

However, some businesses have expressed concern over exports have mostly focused on wood chips for paper
the difficulty of market redirection. Each export product line production. However, if we work hard we could still find