VIETNAMESE FURNITURE SURPASSED CHINESE TO PENETRATE USA

The above information has just been published in a recent study by Furniture Today – a prestigious specialized magazine in the furniture industry.

Vietnamese furniture exports increased by 31% to the US

According to  Furniture Today, in 2020, Vietnam  exported 7.4 billion USD of furniture to the US, up 31% compared to 2019. Meanwhile,  China  exported 7.33 billion USD to this market in the same period, down 25% compared to 2019.
Furniture Today considered that although the gap is relatively small, Vietnam’s position in the worldmarket shows how this country’s furniture industry has developed over the years.

Not only the US market, Vietnam’s exports of wooden furniture and products to the EU market also increased very well. April reached $ 27 million, up 102% over the same period last year. Generally, in the first 4 months of this year, the export of wood and wood products to the EU was estimated at 247.1 million USD, up 31.3% over the same period last year.

Specifically, in the past 2 years, the US government has imposed a high tax rate of up to 25% on most types of furniture. In the second half of 2018, when China’s tariffs started at 10%, the industry started moving out of China. China’s furniture shipments fell 1% to $13.6 billion.

Meanwhile, Vietnam’s shipments increased 9% to $4.2 billion (from $3.9 billion in 2017). A more “strong” shift began in 2019, when Chinese furniture exports to the US fell 28% to $9.7 billion. At the same time, Vietnamese goods increased 35% to about $5.7 billion.

Furniture Today quoted the CEO of Riverside Furniture Group (USA) as saying that bedroom furniture, dining room furniture, office furniture and home office furniture are mostly imported by this business from Vietnam. . He also affirmed that Vietnam is suitable in the field of furniture production “as the leading supplier” of enterprises. According to the same magazine, some other comments said that the tax rate on goods from China to the US had an impact on prices. A representative of Klaussner Home Furnishings said that sales in the wood segment from Vietnam increased by 10% in 2020. Other wooden furniture is the largest export item from Vietnam with $1.9 billion, up 43% year-on-year.

Beware of trade remedies

Mr. Nguyen Chanh Phuong, Vice President and General Secretary of the Ho Chi Minh City Woodworking and Handicraft Association, also said that Vietnam’s furniture exports to the US increased sharply, currently the US market accounts for more than 60% of the total turnover of export furniture and wood products from Vietnam.

However, he warned: “It is also necessary to be “sober” to clearly see that the furniture export enterprises accounting for the majority of the value are enterprises with “foreign investment capital” (FDI), in which FDI from China in the past few years has accounted for a large number.”

There are two worries that the furniture industry needs to see. That is when foreign investors look for opportunities from Vietnam by speeding up their investment, the scarcity of raw materials and the rent of production space will increase sharply, causing many difficulties for domestic enterprises. “Smaller-scale production enterprises, in the face of the massive “attack” of foreign enterprises, are at greater risk of being overwhelmed,” Mr. The second worry, according to Mr. Phuong, is the risk that Vietnam’s wooden furniture and products will be investigated for trade remedies if there is a situation where foreign enterprises “hide their shadow”, only doing the final stage export to the US.

“In fact, at the end of last year, the customs industry has warned that more than a dozen new foreign businesses have been established, export turnover has increased dramatically, there are not many factories …, but so far the investigation has fruitless. That is the risk that genuine businesses in the industry in Vietnam are worried about,” Phuong said, citing the fact that seven sofa-making manufacture in Vietnam have just been preliminarily concluded by a Canadian court to impose tax 101.5% which is a warning.

Quoted from: https://thanhnien.vn/tai-chinh-kinh-doanh/noi-that-viet-nam-vuot-trung-quoc-vao-my-1380015.html