Behind $9.46 Billion in Exports: The Truth About How Vietnam’s Wood Industry Struggles to Boost Profits Despite Rising Output

2026-05-21 Source: Wood Home, New Paradigm of Home Furnishings

According to the international timber industry publication Wood Central, Vietnam—now the world’s second-largest wood-processing and exporting country after China—is projected to generate $9.46 billion in wood exports to the United States by 2025, accounting for 55.6% of its total wood export value.

However, it now appears that this data has laid bare the deep-seated structural contradictions within Vietnam’s timber industry: relying solely on scale expansion and rising shipment volumes is no longer sufficient to break the impasse of “increased volume without increased profits.”

Ngo Sy Hoai, Secretary-General of the Vietnam Timber and Forest Products Association (VIFOREST), stated in an interview with VietnamNet that the growth model driven primarily by processing has reached its ceiling.

Although the United States remains the world’s largest end‑consumer market and, as Wu Shihuai puts it, the “consumption axis,” Vietnamese timber companies earn profit margins of only 5% to 6% under the OEM manufacturing model. In this value‑chain division of labor, U.S. importers control the design stage and capture the bulk of the added value, while contract manufacturers occupy the lowest rung of the profit distribution.

Wu Shihuai pointed out: “The higher the output, the greater the exposure to risk.” Once the United States initiates trade‑remedy investigations or importers renegotiate contract terms, already slim profit margins will face further pressure.

Although the European Union has a population of roughly 450 million, surpassing the United States’ 340 million, Vietnam’s timber exports to the EU totaled only US$750 million in 2025—less than one-thirteenth of its export value to the U.S. This extreme market asymmetry underscores the structural challenges Vietnam faces in diversifying its export markets: after two decades of deep integration with the U.S. market, a pronounced path dependency has taken hold, making it difficult for alternative markets to absorb displaced production capacity at comparable price levels in the short term.

Furthermore, although South Korea has already… to Vietnam Plywood Anti-dumping duties ranging from 10% to 30% have been imposed, yet the price gap between the Korean and U.S. markets highlights the risk of eroding returns in export diversification strategies. Specifically, plywood exported to South Korea is primarily destined for the low-end packaging segment, with prices ranging from USD 230 to 250 per cubic meter, whereas mid- to high‑end products shipped to the United States command prices of USD 400 to 500 per cubic meter.

This price gap indicates that, even with successful market diversification, alternative markets still struggle to match the U.S. market in terms of price‑acceptance capacity.

Wu Shihuai pointed out that relying solely on processing trade, OEM manufacturing, or the crude “labor-for-profit” model is unlikely to sustain the Vietnamese timber industry’s long-term competitiveness in global trade. A prolonged dependence on external design and order inflows leaves the sector continually exposed to systemic risks stemming from shifts in U.S. trade policy. Given that Vietnam’s annual exports of timber and non-timber forest products to the United States approach US$10 billion, any additional tariff measures would directly undermine the profitability resilience of the entire timber value chain.

Wu Shihuai acknowledged that breaking free from reliance on OEM manufacturing is by no means achievable in the short term. With an export volume to the United States totaling US$9.46 billion, meager profit margins of just 5% to 6% have already left the industry squarely within the vulnerable range of potential U.S. tariff measures.

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Editor: Fang Fen