Vietnam overtakes China to become largest furniture exporter to US

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Vietnam exported $7.4 billion worth of furniture to the U.S. last year, compared to China’s $7.33 billion, according to data from U.S. magazine Furniture Today. This marked a 31 percent year-on-year surge for Vietnam, while that of China fell 25 percent.

The shift has happened over the past two and a half years with the U.S. imposing tariffs as high as 25 percent on almost all furniture categories from China, pushing manufacturers to move out.

In 2018 and 2019, Vietnam’s furniture shipments to the U.S. rose by double digits each year, while that of China fell by double digits.

Workers handle plywood on conveyor belts in the central province of Quang Binh. Photo by Shutterstock/Loner Nguyen.

"That doesn’t surprise me at all," said Fred Henjes, CEO of Riverside Furniture Corp. "We are no longer buying products out of China, and I know there are many others besides us."

Strong import categories of this company from Vietnam include bedroom, dining room and home office furniture, Furniture Today quoted him as saying.

Another company, Klaussner Home Furnishings, sources all of its wood furniture from Vietnam now. Its sales in the wood segment from Vietnam were up 10 percent last year.

The U.S. was Vietnam’s largest export market in the first four months at $30.3 billion, up 50 percent, followed by China at $16.8 billion, up 32.4 percent.

Wood sector sets sights on the export target of $14 billion in 2021

Despite facing several trade remedy cases and tax evasion lawsuits over the coming year, the forestry sector has set a target of achieving an export target of $14 billion, according to industry insiders.

Pham Van Dien, deputy director of the Vietnam Administration of Forestry, said despite a tough year caused by the impact of the novel coronavirus (COVID-19) pandemic, timber and forestry exports enjoyed an increase of 16.4% to approximately $13.17 billion last year in comparison to 2019’s figure. In addition, the import value of timber and wood products also witnessed a surge of 11% to $2.58 billion, with the sector’s trade surplus rising by 17.9% to $10.5 billion.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong noted that the forestry sector has encountered numerous difficulties in recent times, including fierce competition in the global market due to Vietnamese plywood exports facing trade defense cases and tax evasion in two of its largest markets, namely the Republic of Korea (RoK) and the US.

Minister Cuong has therefore requested that the Vietnam Administration of Forestry continue to ramp up afforestation for the purpose of sustainable forestry development and export growth moving forward.

Photo: VOV

Concurring with this viewpoint, Deputy Minister of Agriculture and Rural Development Ha Cong Tuan explained that the wood industry should redouble efforts in a bid to remove hurdles that hamper develop production, whilst also intensifying forest protection activities for sustainable development.

With regard to solutions that can deal with tax evasion investigations, Dien stated that the forestry sector has implemented a wide range of drastic solutions to combat the illegal trade of timber and wooden products, with the country even signing a Voluntary Partnership Agreement (VPA) with the EU.

The trade deal, which became effective from June 1, 2019, has helped local firms to sharpen the competitiveness of wooden products exported to the EU, improve forest governance and promote legal trade timber products to this highly lucrative market. Meanwhile, the Vietnamese Government has also issued a decree relating to the local timber legality assurance system.

During a recent meeting of the Joint Committee under the Vietnam-EU Comprehensive Partnership and Cooperation Framework Agreement (PCA), the EU acknowledged that Vietnam has deployed the VPA/ Forest Law Enforcement, Governance, and Trade (FLEGT) Agreement in an effective manner, adding that there are concerns regarding trade fraud cases by foreign enterprises.

Dien stressed that Vietnamese involvement in several free trade agreements such as the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is likely to lead to more cases relating to counterfeiting the origin of Vietnamese goods for export. This is typically done in order to enjoy a tax rate of 0%, with local export businesses set to partner with other relevant units as part of greater efforts to combat these illegal activities.

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