Last Wednesday’s Supreme Court hearings on the legality of President Trump’s tariffs, which put tariffs and trade policy in the news, focused North American hardwood exporters who depend on Vietnam to closely follow the case. The recent escalation in U.S.-Vietnam trade tensions has created a storm for small American importers. Tariffs on Vietnamese goods, initially announced at 46% and later adjusted to 20%, have significantly increased costs for businesses that rely on Vietnam for finished furniture and wood products. Many of these firms operate on thin margins and use raw hardwoods sourced from the U.S., which are shipped to Vietnam for processing before being re-imported. This model once offered cost efficiency; however, tariffs have eroded that advantage, forcing importers to either raise prices or absorb the losses.

For small businesses, the challenge is compounded by scale. Unlike large corporations, they lack the financial resilience to weather sudden cost spikes. Strategies such as diversifying suppliers, shifting production to tariff-free regions, or investing in domestic manufacturing are being considered. However, reshoring production to the U.S. is not without risk. Building new plants requires significant capital and long-term planning, yet tariff policy has proven highly volatile. Recent reversals, such as the 90-day suspension of reciprocal tariffs, underscore the unpredictability of trade policy, which can change dramatically with a new administration.

One of our customers, Whittier Wood Products, Eugene, OR, specializes in Alder furniture. They relocated their production to Vietnam over a decade ago to ensure competitiveness with other manufacturers, who were using skilled but significantly cheaper labor to produce their products. They have continued to keep their product design, sales, marketing, and accounting operations stateside. Being forward-thinking, they reached out to U.S. government officials, seeking options to phase in tariffs and offering ideas around lower rates for suppliers who support the production of U.S.-made wood products. However, this still does not address the challenge they face in determining what manufacturing should be done here and what should remain overseas in the long term.

Industry surveys show that over half of manufacturers are postponing or scaling back investments due to tariff uncertainty. Executives cite volatility, not tariffs themselves, as the biggest challenge. A plant built today to avoid foreign tariffs could become a stranded asset if future policies favor imports again. This risk forces companies to weigh flexibility against sunk costs, making incremental investments and modular expansions more attractive than large-scale commitments.

Ultimately, small importers face a strategic crossroads: adapt through supply chain diversification and lean operations, or gamble on domestic production amid shifting political winds. In a world where tariffs have become a geopolitical tool, agility, not scale, may be the key to survival