China trade war hurting US hardwood mills

Friday 11 Oct 2019

 
It is hard times for the U.S. hardwood lumber industry. The trade war with China has caused a steep drop in U.S. exports of the product, and now the industry is cutting jobs. China used to account for about half of all U.S. hardwood lumber exports, about US$2 billion annually. The Trump administration’s 25% tariff cut through that demand.

In the 12 months since tariffs on U.S. hardwood were announced in July of last year, lumber exports to China were down US$615 million compared with the previous year, according to the American Hardwood Export Council. In June of this year alone, when the full tariff rate went into effect, trade volume to China was half what it was a year ago.

“The American hardwood industry is facing a watershed moment in China. As political and commercial ties between our two countries continue to deteriorate, our industry is caught in the middle of a fight with a country who has been our largest market for a decade,” wrote Tripp Pryor, international program manager at the council, in an August report. “The real long-term danger here is that we are losing market share that will not easily be won back.”

Workers at Northwest Hardwoods’ mill in Mount Vernon, Washington, don’t have much time left on the job. The mill is set to be shuttered in November, and all 70 jobs gone. The Tacoma, Washington-based company, which is one of the largest producers in North America, is also closing a plant in Virginia, cutting an additional 30 jobs, and is then laying off 30 more at the corporate level.

China was its No. 1 export customer. Northwest Hardwoods’ CEO said the tariffs were just too much too fast. “We saw an immediate response from Chinese buyers,” said CEO Nathan Jeppson. “Our business, much like the rest of the industry, is highly dependent and has forged a large relationship selling into the Chinese market, and since the middle of last year, if you just look at year on year, sales are off 43% in total exports to China.”

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Source: cnbc.com

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