Vietnam tightens timber laws to ease US tariff threats

Vietnam’s wood industry, under investigation by the US Trade Representative for allegedly importing illegally harvested or traded timber, is vowing to tighten regulations and buy more American lumber to avoid punitive tariffs that would devastate the sector.

Vietnamese officials are concerned the Trump administration could hit Vietnam with new tariffs on timber as well as other products before it leaves power Jan 20, said Do Xuan Lap, chairman of the Vietnam Timber and Forest Product Association.

“We’ve been buying more and more timber from the US,” he said in a phone interview Friday, adding such imports from the US may increase at least 15% this year. “A high tariff will seriously damage our wood industry, but it will also hurt US companies.”

Vietnamese wood-furniture makers, whose customers include Walmart Inc. and Ashley Furniture Industries Inc., will buy as much as 1.3 million cubic meters of wood in 2021, up from about 800,000 cubic meters in 2019, according to Lap, who is also chief executive of Tien Dat Furniture Corp.

A 25% US tariff on Vietnamese wood products would “devastate” the sector and its 10,000 workers, Lap said.

Vietnam is cracking down on illegal timber imports from countries such as Laos and Cambodia, Nguyen Do Anh Tuan, Director of Department of International Cooperation of Vietnam’s Agriculture and Rural development Ministry, said. The government has doubled its fine for such activities to about $22,000 with prison sentences as much as 10 years, he said.

The US is the biggest market for Vietnamese wood products, representing an estimated $6.5 billion in 2020, about half of the nation’s total agricultural shipments to America last year, Tuan said. Last year, Vietnam bought about 40% of its timber from the US, he said.