Such a tariff, if fully implemented, would significantly raise costs, squeeze profit margins, and dampen demand for Vietnamese furniture in the U.S. market. Vietnamese exporters are now scrambling to assess the impact and devise strategies to sustain growth. A key response is diversification: looking beyond the U.S. and expanding into alternative markets like the European Union (EU), Japan, and South Korea. These markets offer substantial demand and tariff advantages under free trade agreements, but they also come with their own regulatory hurdles. In this article, we will analyze the U.S. tariff situation and explore opportunities in the EU, Japan, and South Korea, examining market potential, trade agreements, regulatory requirements, and examples of companies successfully pivoting to these markets. We will conclude with best practices for Vietnamese firms to adapt, focusing on sustainability, certifications, innovation, and supply chain transparency in order to remain competitive.
On April 2, 2025, the U.S. government under President Donald Trump unveiled a plan to impose “reciprocal tariffs” of 46% on imports from Vietnam. The justification given was that Vietnamese tariffs and trade barriers on U.S. goods were equivalent to a 90% rate, so the U.S. aimed to reciprocate with its own high tariff. This across-the-board tariff rate - far above Vietnam’s competitors like Bangladesh (37%) or Thailand (36%) - was slated to take effect on April 9, 2025. In practical terms, it means virtually all Vietnamese furniture entering the U.S. could face an additional 46% duty, drastically raising their landed cost. These tariffs come on top of existing duties and any anti-dumping measures, representing a massive cost increase for importers and consumers of Vietnamese furniture in the U.S.
The United States has been the lifeline of Vietnam’s furniture export boom. In 2024, Vietnam’s wood and furniture exports hit a record $16+ billion, with the U.S. market accounting for roughly 56% (about $9.1 billion). Over two-thirds of Vietnamese wood exports to the U.S. are finished furniture products - high-value items like bedroom sets, sofas, and kitchen cabinets. A 46% tariff threatens to price these products out of the market. Profit margins, which are already thin in the furniture manufacturing sector, would be severely eroded. Vietnamese companies could lose contracts as U.S. buyers turn to non-tariffed sources. Order volumes and jobs in Vietnam’s wood industry are at risk, as a tariff of this magnitude could easily shrink demand. Industry experts warn of pressure on Vietnam’s export growth targets, and there is widespread concern among Vietnamese furniture manufacturers about factory slowdowns or layoffs if U.S. orders decline. In short, this tariff move directly threatens Vietnam’s dominant market for furniture exports, forcing companies to rethink their sales strategies for 2025 and beyond.
The European Union, with 27 countries and a combined population of over 450 million, is one of the world’s largest furniture markets. EU consumers have a strong appetite for stylish and sustainable furniture. For Vietnam, however, the EU market has been under-tapped compared to the U.S. Currently Vietnamese wood products make up only 1.9% of the EU’s wood furniture imports - a small share, suggesting huge room for growth. In 2024, Europe was among Vietnam’s top five export destinations for wood products (alongside the U.S., Japan, China, and South Korea). As of late 2024, Europe’s demand was rebounding with economic recovery, and Vietnamese businesses actively participated in trade fairs in Germany, France, and Italy to make inroads.
Vietnam and the EU implemented the EU-Vietnam Free Trade Agreement (EVFTA) in August 2020, which is a game-changer for market access. Under the EVFTA, most Vietnamese furniture and wood products enjoy 0% import tariffs in the EU. In fact, about 83% of tariff lines for wood products were reduced from their 6% average rate to 0% immediately when the agreement took effect, and the remaining 17% of wood product tariffs are being phased to 0% within 5 years. By 2025, virtually all Vietnamese wood and furniture exports to Europe will be duty-free. This gives Vietnamese exporters a major price advantage over competitors from countries without an FTA. For example, items like plywood, fiberboard, and furniture parts that used to face EU duties of 2-4% now enter at zero tariff. Likewise, various furniture categories (such as wooden kitchen furniture and furniture components under HS 9403) are benefiting from tariff elimination. The EVFTA not only cuts costs but also includes provisions to simplify customs and encourage bilateral trade. As a result of these advantages, Vietnam’s wood industry sees the EVFTA as a “broad roadmap” to boost exports to the EU market.
While tariffs are low, the regulatory bar in the EU is high, especially regarding sustainability and legality of wood. The key regulation to understand is the EU Timber Regulation (EUTR), which has been in force since 2013. The EUTR prohibits the placing of illegally harvested timber or timber products on the EU market and mandates that importers exercise due diligence to avoid illegal wood. In practice, EU importers must collect information on the country of harvest, tree species, volume, supplier details, and compliance with local laws for any wood product. They must assess risk and mitigate any risk of illegal timber (for example, by demanding certifications or verifications).
This means Vietnamese exporters need to maintain thorough documentation of their wood sourcing - from proof of legal harvest (e.g., logging permits, certificates) to supply chain traceability - so that their EU buyers can fulfill these due diligence requirements. Notably, Vietnam has taken steps through a Voluntary Partnership Agreement (VPA) with the EU to ensure a Timber Legality Assurance System, though full FLEGT licensing is still in progress. In addition to EUTR, the EU has recently approved an even stricter law: the EU Regulation on Deforestation-Free Products (EUDR). Coming into effect in late 2024-2025, this new rule will require companies to ensure not only legality but also that their wood (and other commodities like coffee, rubber, etc.) is not associated with deforestation. It will likely increase due diligence requirements further, including geolocation of harvest areas and proof that wood was not harvested from recently deforested land. Vietnamese exporters must be prepared for this heightened scrutiny. Those who can demonstrate legal and sustainable sourcing - for example through third-party certifications - will have a smoother entry into the EU.
Another major environmental regulation on the horizon is the EU’s Carbon Border Adjustment Mechanism (CBAM). CBAM is initially targeting carbon-intensive goods like steel, aluminum, cement, electricity, and fertilizers, not furniture. However, it signals the EU’s direction on climate: the CBAM’s goal is to put a “fair price” on the carbon emissions of imported goods and ensure imported products face the same carbon costs as EU products. While wood furniture is generally not directly under CBAM now, climate policies are tightening globally. Vietnamese furniture makers might in the future need to report on the carbon footprint of their production (e.g. energy used in factories, supply chain transport emissions) if such measures expand. Additionally, if furniture contains components like metal or foam (which have carbon-intensive manufacturing), there could be indirect impacts. In essence, the EU market rewards sustainable practices - from legal timber, to low emissions, to ethical labor. Vietnamese companies must adapt by complying with EU standards such as the EUTR/EUDR (for wood legality) and staying aware of climate-related rules like CBAM. On the positive side, those who invest in compliance can market their products as “sustainably sourced” and gain trust with European buyers, who are often willing to pay a premium for certified sustainable goods.
A growing number of Vietnamese furniture firms have found success in Europe by aligning with these market requirements. FSC certification (Forest Stewardship Council) has become almost a “visa” for entering the EU market. As one Vietnamese industry expert noted, FSC certification offers a competitive advantage in the EU, especially under the EVFTA’s favorable trade terms. For instance, Truong Thanh Furniture Corporation (TTF), one of Vietnam’s leading wood furniture manufacturers, exports extensively to Europe and does so by meeting high standards. TTF supplies well-known European brands such as Natuzzi (an Italian luxury furniture retailer), leveraging FSC-certified materials to satisfy EU buyers’ requirements. TTF’s ability to trace its wood to legal sources and its investment in sustainable forestry have enabled it to become a direct exporter to the EU, rather than just a subcontractor. Another example is a smaller company that shifted from the U.S. to the EU after 2018: facing U.S. anti-dumping duties on certain wooden cabinets, the company obtained FSC certification and entered the German market with kitchen furniture, finding receptive customers due to the eco-friendly branding. These cases show that Vietnamese companies can penetrate the EU market successfully by emphasizing legality and sustainability..
Japan is the world’s third-largest economy and a mature but sizable market for furniture. Japanese consumers value high-quality craftsmanship, durability, and modern design, often with a preference for minimalist or space-saving furniture given smaller living spaces. For Vietnamese exporters, Japan has been a steady market: Japan typically ranks among the top importers of Vietnam’s wood products (in 2024 it was Vietnam’s second-largest wood export market after the U.S. by some accounts . Vietnam already supplies a range of products to Japan, from indoor furniture to outdoor garden items and wood pellets (for energy) - in fact, Vietnam is a major source of wood materials like pellets for Japan’s biomass energy sector. In furniture, Japanese import demand is substantial but highly competitive, with local manufacturers and other Asian exporters in the mix. The good news is Vietnam has a strong reputation in Japan’s furniture industry, aided by close business ties and Vietnam’s participation in regional trade pacts. Many Japanese companies have invested in Vietnam’s wood processing sector over the years, bringing in technology and quality control practices. For example, the Japanese furniture retail giant Nitori operates multiple factories in Vietnam to produce furniture for its stores, indicating trust in Vietnam’s production quality. The market potential in Japan for Vietnamese exporters lies in tapping niches: such as providing components or semi-finished wood products to Japanese manufacturers, or exporting finished furniture that meets Japan’s strict quality and safety standards. With an aging population, Japan’s domestic furniture output has declined, and import reliance has grown - a trend Vietnamese firms can capitalize on if they meet expectations for precision and quality.
Vietnam’s exports to Japan benefit from multiple trade agreements. Chief among them is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a multilateral FTA that includes both Vietnam and Japan. Under the CPTPP (which entered into force for Vietnam and Japan in 2019), tariffs on most industrial goods were eliminated or are being phased out. Japan has eliminated import duties on many furniture products from CPTPP partners. For example, Japan’s tariffs on wooden furniture, which were already low, have been reduced to 0% for Vietnam under CPTPP commitments (in many cases immediately upon CPTPP’s effect or after short phase-outs). In addition, Vietnam and Japan have an older trade agreement via ASEAN (the ASEAN-Japan Comprehensive Economic Partnership) and are both parties to the Regional Comprehensive Economic Partnership (RCEP) as of 2022. These layered agreements mean Vietnamese furniture enters Japan with minimal or zero tariffs, making it cost-competitive. Japan’s import tariff on furniture is typically around 0-3% for WTO MFN, so FTAs basically neutralize any tariff disadvantage. Furthermore, Vietnam and Japan have investment and economic cooperation that facilitates easier business matching. The upshot is that tariffs are not a barrier in the Japan market - Vietnamese companies can export under preferential duty rates, often completely duty-free, under CPTPP or RCEP. It’s important for exporters to use the correct Certificate of Origin (e.g., CPTPP CO form) to ensure their Japanese buyers can claim the tariff exemption. Beyond tariffs, Japanese importers value reliability and long-term relationships, so Vietnam’s growing credibility as a stable supplier is a plus. The presence of Japanese firms in Vietnam’s furniture industry (through joint ventures or sourcing offices) further smoothens entry, as they often assist Vietnamese producers in meeting Japanese requirements.
Japan’s market is highly demanding in terms of quality, safety, and compliance. One critical area is chemical and safety standards for indoor furniture. Japan has some of the world’s strictest regulations on formaldehyde emissions from wood products, driven by its “sick house” syndrome prevention efforts. The Japanese Industrial Standards (JIS) employ a formaldehyde emission grading system, with F★★★★ (F Four-Star) being the highest grade signifying ultra-low emissions. This F★★★★ standard sets formaldehyde emission for wood-based materials at ≤0.3 mg/L - one of the most stringent limits globally. In practice, any plywood, particleboard, MDF, or composite wood used in furniture for indoor use in Japan often must be certified to F★★★★ to be widely accepted in the market. Vietnamese exporters need to ensure that their raw panels or finished products meet these standards to avoid health concerns. This might involve using low-formaldehyde glues, properly curing finishes, and possibly getting JIS or JAS (Japanese Agricultural Standard) certifications for their wood materials. Japanese importers will often test products for formaldehyde; failing to meet the standard can result in rejected shipments. Apart from formaldehyde, Japan enforces strict product quality control - for example, furniture must be sturdy and safe (folding furniture should have safety locks, paint and coating must not have toxic elements beyond allowable limits, etc.). While Japan does not have an exact equivalent of the EU’s CE marking for furniture, compliance with JIS standards and obtaining certifications (for fire retardancy, strength tests, etc.) can greatly enhance credibility.
Implemented in 2017 and recently strengthened, the Clean Wood Act is Japan’s initiative to ensure only legally harvested timber is used in both domestic and imported products. The Act encourages (and for certain businesses, requires) companies to verify the legality of their wood sources (). Under the Clean Wood Act, companies in Japan that deal in timber can register as “Type 1 operators” and are expected to conduct due diligence on suppliers, somewhat analogous to EUTR but on a voluntary basis initially. As of April 1, 2025, an amendment to the Clean Wood Act has taken effect, which broadens its scope and introduces more oversight. The amended law extends obligations to more businesses (including retailers) and may introduce penalties for non-compliance, signaling a tighter enforcement stance () (). Practically, this means Japanese importers might ask Vietnamese suppliers for detailed proof of legality: such as harvest permits, certificates of origin for wood, or internationally recognized certifications like FSC. In the absence of penalties, many Japanese firms still take compliance seriously as a corporate social responsibility matter. Vietnamese exporters aiming at Japan should be prepared to provide documentation on timber legality, similar to what EU requires. Fortunately, documents that satisfy EU or U.S. Lacey Act requirements (like FSC certification or a Vietnamese FLEGT license when available) will generally satisfy Japanese buyers as well.
With the U.S. market facing turbulence from tariffs, Vietnamese furniture exporters must elevate their game to succeed in alternative markets. The challenges of entering the EU, Japan, or South Korea can be overcome by adopting best practices that enhance competitiveness and ensure compliance. Here are key strategies and best practices for Vietnamese companies to adapt and remain resilient in the global furniture industry:
Lastly, collaboration and learning will bolster these best practices. Vietnamese companies can share experiences through industry associations (like HAWA - Handicraft and Wood Industry Association of HCMC, or VIFORES at the national level) and jointly advocate for supportive policies. The government can assist by fast-tracking the national timber legality assurance so that Vietnamese wood products come with government-backed legality licenses, further easing entry into strict markets.
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By integrating data - driven sustainability into their core operations, exporters can unlock new markets, build resilient supply chains, and strengthen their competitive edge for the long haul particularly in the face of the disruptive wave of U.S. tariffs. The future of Vietnamese furniture is not just about craftsmanship. It’s about smart, sustainable growth. And VertZéro is here to lead the way.
