China is threatening our jobs and our way of life – and it needs to be addressed.
Chinese retaliatory tariffs have been in place since June, affecting $60 billion of more than 5,000 U.S. goods. Wood, tariffed from 5 percent to 25 percent, is among those products. The Hardwood Federation reports:
- Oak species at 25%;
- Cherry and ash at 20%; and
- Walnut, hard maple, tulipwood and alder at 5%.
Of the hardwood lumber produced in the U.S., 24 percent is exported to China and 22 percent is exported to other countries. China's tariffs 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.
“Once some mills go out of business, if the tariff war continues for very long, then when the lumber market demand finally increases, the shortage of lumber, due to increased demand from China markets (China is the largest consumer and manufacturer of forest products) and with fewer U.S. sawmills, we will see record high hardwood lumber prices. Sawmills will then do very well, but secondary manufacturers in the U.S. will be struggling indeed with higher lumber prices.”
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