Businesses to show a stronger presence on e-commerce platforms

Expectations for growth in the U.S. market

The Ministry of Industry and Trade reports that the U.S. economy remains optimistic in early 2025, bolstered by stronger-than-expected private sector activity and continued growth in consumer spending, which is expected to support economic momentum.

According to estimates from S&P Global, a market leader in credit risk research, the U.S. Composite PMI for December 2024 rose to 56.6 from 54.9 in November. This reflects the strongest growth in U.S. private sector activity since March 2022, with robust growth in the services sector offsetting declines in manufacturing activity.

The U.S. Services PMI increased to 58.5 in December 2024 from 56.1 in November, defying expectations of a decrease to 55.7 and marking the strongest growth since October 2021. Conversely, the Manufacturing PMI declined to 48.3 in December 2024 from 49.7 in November, falling short of the forecasted 48.9 and marking the sixth consecutive month of contraction in U.S. manufacturing activity.

Opportunities for Vietnam in the U.S. market

Mr. Do Ngoc Hung, Vietnamese trade counselor in the U.S., noted that as the eighth-largest trade partner globally and the largest within ASEAN, Vietnam has significant opportunities to expand its activities in the U.S., especially during the first half of 2025.

Vietnamese goods are seen as complementary rather than directly competitive with U.S.-made products, making them more accessible to U.S. consumers who value improved quality, diverse designs, and competitive prices.

In addition to growing wholesale and retail markets in the U.S., a further incentive for Vietnamese businesses to boost exports is the continued decline in U.S. inventory levels since late 2024. Many of the goods in demand align with Vietnam's export strengths.

"During meetings with diplomatic representatives, U.S. retail corporations have affirmed that Vietnam is a long-term strategic partner," Mr. Hung shared.

In Q1 2025, Walmart, the world’s largest retailer, plans to collaborate with the Ministry of Industry and Trade to organize information sessions for 150-200 Vietnamese wholesalers and retailers. These sessions aim to facilitate the inclusion of Vietnamese products in Walmart's distribution systems and online platforms. Each year, Walmart consumes approximately USD 2 billion worth of Vietnamese-exported products in global markets.

While opportunities are abundant, Mr. Hung advises small and medium enterprises (SMEs) in Vietnam to be cautious of U.S. trade defense measures. SMEs with limited resources are encouraged to work directly with diplomatic representatives to verify the legal and financial status of foreign partners before entering into transactions.

To succeed in the U.S. market, Vietnamese businesses are urged to focus on building their presence on e-commerce platforms like Walmart and Amazon, maintaining intermediary distribution channels, and participating in international trade fairs through trade promotion programs.

In its December 2024 meeting, the Federal Reserve (FED) implemented its third consecutive interest rate cut of 25 basis points in 2024, bringing the federal funds rate to 4.25-4.5%.

In 2025, the FED has signaled potential monetary easing and raised its GDP growth forecast for 2025 to 2.1% from 2.0%. Inflation is also projected to rise to 2.5% from the previous estimate of 2.1%. These factors provide a solid foundation for Vietnamese businesses to continue expanding exports to the U.S. market.

Major impact on furniture and handicrafts

A recent survey conducted by Furniture Today in December 2024 revealed that the tariffs proposed by President-elect Donald Trump are likely to significantly impact the furniture industry. Nearly half of respondents (46%) believe that the proposed 25% tariff on goods from Canada and Mexico, alongside a 10% tariff on products from China, will have substantial repercussions.

The anticipated consequences of these tariffs include increased costs for consumers (87%) and within the supply chain (83%). Respondents also noted other potential challenges, such as inflation (71%), a shift in production to other countries (68%), retaliatory tariffs on U.S. exports (56%), product shortages (44%), and job losses in targeted countries (43%).

Notably, almost half (45%) of respondents predict that U.S. furniture sales will decline in the coming year due to the tariffs.

To mitigate the impact, U.S. furniture manufacturers are expected to increase prices, adjust international sourcing strategies, boost domestic production, and stockpile inventory ahead of the tariffs taking effect.

As a result, potential alternative supply sources mentioned include Vietnam, India, Brazil, and European countries with low or no tariffs.

In 2025, Vietnam’s wood industry is expected to gain momentum from shifts in U.S. consumer habits. With a strong trend toward sustainable, recycled, and environmentally friendly products, Vietnamese handicraft furniture is capturing market share in the world’s leading economy thanks to its superior quality and sustainability. This presents a significant opportunity for Vietnamese businesses to expand their export markets.

Vietnamese handicraft furniture is now present in many major retail chains in the U.S., ranging from supermarkets to high-end furniture stores. The European and American Market Department (Ministry of Industry and Trade) is confident that Vietnam will continue to be an attractive destination for handicraft furniture manufacturers, including those exporting to the U.S.

Businesses can leverage low labor costs and abundant raw materials to produce high-quality, competitively priced products. This creates a notable advantage when competing with other countries in the region, such as China or India, which also have a strong presence in the industry.