After US tariffs: European hope for Vietnamese handicrafts?

Vietnamese handicraft businesses have long benefited from a global appreciation for sustainable and artisanal creations, particularly in the US market, but now face a significant turning point. Price competition and the new implementation of extra US tariffs effective April 5, 2025, on top of the previous 0% rate, are forcing a critical reassessment of export strategies (Associated Press 2025). In the meantime, as the American dream is becoming more challenging, could Europe be considered a reasonable alternative because of its strong emphasis on environmental values and promising markets such as Finland and Germany (Nguyen & Nguyen 2025; VietnamPlus 2025)?

The challenging US landscape

The US has been a primary market for Vietnamese handicrafts, especially eco-friendly items made from water hyacinth. However, the price competition from many sellers and producers, primarily in China, has made it difficult for smaller Vietnamese businesses to compete on cost in this market. This problem is becoming more difficult because of the recently implemented US tariffs, which directly raise export prices and reduce profit margins (Al Jazeera 2025). All of these elements, when combined with growing transportation, warehousing, and storage costs, produce an increasingly challenging environment that threatens the long-term growth and market share of Vietnamese handicraft exporters to the United States.

Promising European opportunities

Besides Finland, Vietnamese businesses find Germany, the biggest and most advanced European economy, a desirable business destination. Its extensive network of well-known retail and online commercial channels offers a variety of ways to connect with a large consumer base. Due to their natural qualities, water hyacinth handicrafts fit in very well with the German market where many of the customers appreciate a certain level of sustainability and quality. Moreover, the general European attitude toward durability and the environmental impact of the product resonates strongly in Germany. German and Finnish markets and commercial infrastructure are essential for Vietnamese handicraft companies to overcome the obstacles in the US and generate new expansion areas. (VietnamPlus 2025; Friedrich Naumann Foundation for Freedom 2022.)

Additionally, under the European Union’s Generalised Scheme of Preferences handicrafts from developing countries including Vietnam are generally preferentially and often zero rated. In this beneficial tariff environment, it helps to improve the competitiveness of Vietnamese exports to the EU, fully compensate the negative consequences of the newly imposed US tariffs. (European Commission 2025.)

Effective distribution channels are crucial

Despite all of Europe’s positive signals, Vietnamese businesses still have to deal with some challenges, including demanding quality standards, different aesthetic preferences (usually preferring Scandinavian minimalist designs), and linguistic and cultural barriers (Bradford Jacobs 2024; Nguyen & Nguyen 2025) in these new markets is essential for successful expansion. Success in Europe requires intensive market research in target countries like Finland and Germany, investment in high-quality, European-aligned designs, and building a strong brand story emphasizing sustainability, natural origins, and addressing durability concerns with clear product maintenance information. Developing effective online and offline distribution channels are also crucial for reaching European consumers.

Faced with difficulties in the US market due to new tariffs and intense competition, Vietnamese handicraft exporters have the opportunity to explore the European market. The strong focus on sustainability of European consumers and their passion for high quality goods is a possible solution. Vietnamese businesses must tackle the challenges, communicate and deliver their value proposition to gain a sustainable growth and a strong presence in the European marketplace.

References 

Al Jazeera. 2025. Trump’s 10 percent tariff takes effect, raising fears of global trade war. Cited 5 Apr 2025. Available at https://www.aljazeera.com/news/2025/4/5/trumps-10-percent-tariff-takes-effect-raising-fears-of-global-trade-war

Associated Press. Trump tariffs draw swift backlash from world leaders. Cited 8 Apr 2025. Available at https://apnews.com/article/trump-tariffs-us-world-reaction-5b8411d056e013015a0df6227b41dd5b

Bradford Jacobs. 2024. Expanding into Europe: Overcoming Regulatory and Cultural Barriers. Cited 8 Apr 2025. Available at https://bradfordjacobs.com/blog/expanding-into-europe-overcoming-regulatory-and-cultural-barriers/

European Commission. Generalised Scheme of Preferences. Cited 10 Apr 2025. Available at https://policy.trade.ec.europa.eu/development-and-sustainability/generalised-scheme-preferences_en

Friedrich Naumann Foundation for Freedom. 2022. Exploiting the EVFTA to Import and Export Goods Between Vietnam and Germany. Cited 13 May 2025. Available at https://www.freiheit.org/sites/default/files/2022-03/exploiting-the-evfta-to-import-and-export-goods-between-vietnam-and-germany.pdf

geralt. 2017. Altmann, G. Sanomalehti, uutiset, valtti, Donald. Pixabay. Cited 20 May 2025. Available at https://pixabay.com/fi/illustrations/sanomalehti-uutiset-valtti-donald-1959739/

IMARC Group. Europe Handicrafts Market. Cited 10 Apr 2025. Available at https://www.imarcgroup.com/europe-handicrafts-market

Nguyen, P. L. & Nguyen, T. 2025. A Study of Consumer Perceptions on Water Hyacinth Products in Vietnam and Finland. Thesis. LAB University of Applied Sciences. Cited 20 Apr 2025. Available at https://urn.fi/URN:NBN:fi:amk-2025051311443

VietnamPlus. 2025. Vietnam Showcases Products at Germany Consumer Goods Trade Fair. Cited 13 May 2025. Available at https://en.vietnamplus.vn/vietnam-showcases-products-at-germany-consumer-goods-trade-fair-post309571.vnp