Tariffs Impacting Exports

According to a statement recently released by the Hardwood Federation (HF), trade and tariffs are dominating the news cycle and affecting each and every lumber businesses in some way. Many are hurting. Some are close to closing. So with direction from the Hardwood Federation Board of Directors, HF decided to take a harder stand, complete with a recently held "Trade Days" Mini Fly-In -- the first of its kind in HF history. 

 Willing participants came to Washington, DC to meet with their Senators and some select Administration officials in order to leverage the most possible action from those who may have the President’s ear - because in the end, the only person who is making the calls on U.S. trade policy is President Donald Trump himself. 

In total 24 Hardwood industry representatives joined HF in Washington, DC and met with 17 Senate offices (including 10 Senators) and one new Representative, participated in two phone calls with Senators, and held one round table discussion with Senior USDA FAS Staff, and another with the Vice President's Chief of Staff and Policy Director.

These Hardwood leaders shared their own stories with real world economic and labor impacts caused by the trade war with China and the devastation that the increase to 25 percent tariffs have already triggered. Pre-Tariffs, the Hardwood industry exported approximately $4 billion of goods worldwide, 50 percent of that total goes to China - by far this country’s largest export market. 

There is no immediate market, domestic or international, to replace the Chinese market. The next largest is Vietnam at approximately $200 million annually, which is about 1/10th of the Chinese market.

According to the American Hardwood Export Council (AHEC) in the past three quarters alone, the value of exports have declined by an average of $154 million per quarter, a 42 percent reduction of exports to our largest market... all under the 5 percent and 10 percent tariffs. The rise to 25 percent will be simply devastating.

 These tariffs will impact everyone in the industry, even those who don't export. The decline in exports has led to an excess of product on the open market, which is driving down lumber prices for everyone. Mills are unable to sell lumber for what they bought it forcing layoffs and closures, which in turn hurts tree growers and loggers with nowhere to sell their supply.  If Hardwood mill capacity continues to disappear it will affect the entire supply chain. Markets lost can be markets lost forever. This will also allow China to have free access to the U.S.’s vast supply of raw materials and they will be able to purchase them on the cheap.

HF Executive Director Dana Cole noted, “It was very disappointing that, even with an incredible outpouring from the industry, U.S. Hardwood producers were not included in the recent financial support program announced by USDA. The Hardwood Federation is working with a bi-partisan group of Senators and House members to generate letters to USDA in support of industry relief for Hardwood producers. We are also continuing to reach out pertinent Administration officials to share our grave concerns. And of course we consistently encourage the Administration to get back to the negotiating table and figure out some resolution to this brutal war.

“We are now asking Congress to push U.S. Department of Agriculture Secretary Sonny Perdue to include the Hardwood industry in any current and future aid packages. There is a co-sponsored letter making its way around the House of Representatives and several Senators have sent individual letters on this supporting the industry. There is also hope - guarded hope, but hope nonetheless - that when President Trump and Chinese President Xi Jinping sit down on the sidelines of the G20 Summit in Japan that some way to get back to the negotiating table will be found. Everything we continue to hear is that the two sides were incredibly close to an agreement before falling apart at the last minute early in May.”

The Hardwood Federation board and staff is working every angle to make Congress and the Administration aware of the plight of our industry. HF also encourages you to reach out to your elected officials and share your stories. The HF’s Contact Congress outreach tool makes it easy....you may access it at: https://www.votervoice.net/THF/campaigns/66462/respond .  

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