US imposes 46% tax on Vietnam: Wood industry enterprises seize “narrow door”

It is expected that tomorrow afternoon (April 7), the “Conference of the Prime Minister with ministries, branches, Vietnamese representative agencies abroad, associations and enterprises to proactively adapt to the new situation of international trade” will be held under the chairmanship of Prime Minister Pham Minh Chinh. The conference is held in the context of the US announcing the Executive Order, applying minimum and additional tax rates to 180 import markets, of which Vietnam is subject to a tax rate of 46%, among the highest in the world. Many opinions expressed surprise and concern about Vietnamese goods exported to this market, including wood and wood products.

Experts assessed that according to the reciprocal tax signed by the US, the damage to the Vietnamese forestry industry will be from 2-3 billion USD, and at the same time affect the entire production chain of the forestry industry. Therefore, businesses need to take advantage of the above “narrow door” so that export activities to this market are not greatly affected.

The US is the largest import market for wood and wood products from Vietnam, accounting for more than 50% of the market share each year.

Mr. Ngo Sy Hoai, Vice President of the Vietnam Timber and Forest Products Association (Viforest), expressed his opinion that the US tax rate is “terrible” and hoped that Vietnam could negotiate. Because according to him, in many previous comments, the expected tax rate was lower, so with the figure of 46%, wood enterprises will have a lot of difficulties.

A representative of the Binh Duong Wood Processing Association (Bifa) also said he was shocked and had not yet recovered after receiving the information. “46% is too high. Export goods with a profit of 5-7% is already good, now that the import tax is up to 46%, I am afraid that purchasing power will decrease,” said the Bifa representative.

According to this person, 60-70% of Vietnam’s wood and wood products are aimed at the US market, this rate in Binh Duong enterprises is up to 80%, so the US imposing a tax of 46% could cause partners to cancel orders and reduce quantity.

“The US tax policy is quite complicated, our business is currently listening to the next reaction from our partners and we really hope that the Government and relevant agencies will soon have solutions to support businesses,” Bifa representative emphasized.

According to the data reported by the Ministry of Agriculture and Environment, in 2024, the US was the country that imported wood and wood products, the US was the largest import market in Vietnam’s 16.2 billion USD export turnover, accounting for 55.5% market share.

Along with that, in the first 2 months of this year, wood and wood product exports to the US market continued to lead the markets with a value of 1.3 billion USD, an increase of 9.5% over the same period in 2024.

According to the reciprocal tax that the US has signed, the damage to the Vietnamese forestry industry will be from 2-3 billion USD, and at the same time affect the entire production chain of the forestry industry.

Given the above reality, experts assess that the US tax policy is quite complicated, so businesses need to listen to the next reaction from partners and, more importantly, the Government and relevant agencies should soon have solutions to support businesses.

Mr. Tran Quang Bao, Director of the Department of Forestry and Forest Protection, Ministry of Agriculture and Environment, said that this department, together with the Timber and Forest Products Association, has established a tax list of all products so that when the Minister of Agriculture and Environment works with the Minister of Industry and Trade, they can calculate and apply equivalent taxes.

In addition, Mr. Bao also reminded businesses about implementing the agreement on controlling illegal logging and trade. Recently, the State management agency of agriculture and the American Chamber of Commerce also signed an agreement on anti-dumping. Up to now, the Ministry of Agriculture and Environment has also developed and issued decrees and circulars on management and traceability of forest products.

Response efforts have also been clearly demonstrated by the authorities, especially the Ministry of Agriculture and Environment, through recent meetings and discussions with representatives of US Government agencies to find the most suitable solutions.

“The two countries’ strong agricultural products are complementary and do not compete with each other, so Vietnam is very willing to open its doors to US agricultural products. These are decisions that benefit both countries,” affirmed Minister of Agriculture and Environment Do Duc Duy.

On the business side, Mr. Ngo Sy Hoai said that businesses can minimize risks in case Vietnam’s largest wood import market imposes tariffs. Accordingly, they are ready to participate in “hearings” if the US side requests proof that the trade relationship in the wood sector between Vietnam and the US is “a complementary relationship.”

“Although it is difficult to predict, the US President is willing to listen and dialogue, especially with a friendly country that is highly appreciated by the US like Vietnam,” Mr. Hoai shared and emphasized that this is an opportunity, a “narrow door” that the wood industry needs to grasp so that export activities to this large market are not affected.

With that spirit, according to him, businesses must clearly position the market, what products are sold to which market; where the raw materials for that product are sourced; if it is a domestically planted forest, it is necessary to determine what type of tree is suitable to plant.

Source: diendandoanhnghiep.vn