SEATTLE, Wash. -- The trade war between the United State and China has not only resulted in higher costs for U.S. consumers on home appliances, electronics, apparel, footwear, and industrial machinery, but has also affected U.S. exporters of forest products to China.
According to Wood Resources International LLC, China’s economy slowed during 2018 and early 2019, causing the total value of imported wood pulp, lumber and logs to decline by more than 10 percent from the first four months of 2018 to the same period in 2019.
Simultaneously, reports the Wood Resource Quarterly, forest product imports from the U.S. fell by almost 42 percent in value.
The new retaliation tariff by China on incoming hardwood lumber to their country from the U.S. will eliminate much of the sales of U.S. lumber to China, said Gene Wengert, the Wood Dr. This means a surplus of hardwood lumber in the U.S. and decreasing lumber prices.
These price drops are likely to make a significant number of sawmills become non-profit operations as profit margins for hardwood sawmills are very small right now.
According to WRQ, From January to April, 2019, China imported logs, softwood lumber, and pulp from the U.S. collectively valued at $600 million. This is down from $1.03 billion worth of forest products imported during the same period in 2018.
The biggest declines in import value of U.S. forest products from the first quarter of 2018 to the first quarter of 2019 have been those of wood pulp and hardwood logs, falling $220 million and $110 million, respectively.
With forest product imports from the U.S. deteriorating and American wood product exporters losing market shares in the Chinese market, imports from other countries, including Canada and Russia, have fallen less or even expanded the past year.
While the U.S. market share for forest products imports has fallen by 35 percent from the first four months of 2018 to the same period in 2019, Canada’s and Russia’s shares have gone up by 12 percent and and 4 percent, respectively.
Even if the trade negotiations between the US and China result in lower or eliminated tariffs in the future, the new supply sources that Chinese forest products importers have developed during the on-going trade dispute will likely remain, permanently changing historic trade
flows to China. See http://www.WoodPrices.com.
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