The plywood market in 2025: Challenges from geopolitics

The current context

Global trade tensions are entering a new phase with unpredictable developments. According to a recent statement by Donald Trump, a uniform 10% tariff has officially taken effect against China—more than doubling the existing average tariff on the country. Meanwhile, Canada and Mexico are also facing the risk of a 25% tariff. This suggests that trade protectionism is no longer confined to the U.S.-China trade war but may extend to all of the U.S.’s key trading partners.

The impact on the plywood industry

The market impact

The global plywood market is experiencing profound changes. Between 2018 and 2020, when a 25% tariff was imposed on China, the country’s plywood market share in the U.S. dropped from 58% to 31%. However, no single country has been able to fully replace China due to production capacity and technological constraints.

With its massive production capacity and annual output, China is forced to find alternative markets to absorb its surplus caused by the trade war. This increases competitive pressure on other plywood-producing and exporting countries. However, global plywood prices in 2025 are projected to rise due to several factors such as:

• The price from raw materials.
• Fluctuations in transportation and logistics expenses.
• Pressure from new tariff policies.
• The need for companies to restructure production.

With this current state, are there any opportunities or challenges for the Vietnamese plywood industry?

Opportunities and challenges for our plywood industry

Opportunities

1. Expanding market share in the U.S. as Chinese products face high tariffs.
2. Attracting FDI from multinational companies.
3. Upgrading technology and production capacity.
4. Developing new markets through signed FTAs.

Challenges

1. Risks from anti-circumvention tariff investigations.
2. Intense competition with regional countries.
3. Environmental and sustainable development pressures.
4. Fluctuations in raw material markets.

Market forecast for 2025

Scenario 1: Strict Protectionist Policies

• Tariffs on China increase to 60%.
• Other U.S. trading partners also face tariffs.
• Global plywood prices may rise by 25-30%.
• Market fragmentation based on trade blocs.

Scenario 2: Selective Protectionist Policies

• Tariffs mainly target China.
• Other countries receive conditional exemptions.
• Plywood prices increase by 15-20%.
• Opportunities for countries replacing China.

Recommendation for businesses

Short-Term Strategies

1. Strengthen product origin controls.
2. Diversify export markets.
3. Optimize production costs.
4. Improve product quality.

Long-Term Strategies

1. Invest in modern production technologies.
2. Develop sustainable raw material sources.
3. Build an international brand.
4. Deepen integration into the global value chain.

Recommendation for policy

For the Government

1. Improve the legal framework on product origin.
2. Support businesses in enhancing competitiveness.
3. Strengthen bilateral trade negotiations.
4. Develop supporting industries.

For plywood associations

1. Enhance monitoring and early warning systems.
2. Assist businesses in accessing market information.
3. Organize training programs to improve capabilities.
4. Promote industry-wide collaboration.

With an unstable state from the global marketplace, our plywood industry must adopt flexible and sustainable development strategies. Seizing opportunities from protectionist policies must go hand in hand with strengthening internal capabilities to ensure long-term sustainable growth.