BURLINGTON, Wa. - The largest North American hardwood supplier will close one of its Washington sawmills because of the U.S.-China trade war, the company said. All of the mill's 70 employees will be laid off.
Tacoma, Washington-based Northwest Hardwoods will close the mill on November 20. The company also recently closed a small Virginia mill.
“This difficult decision was made after exploring all other options and as prospects dimmed for a quick resolution to the U.S. and China trade dispute,” said the company in a statement.
We recently reported on U.S. Department of Agriculture data that indicates exports of hardwood lumber to China have fallen 40 percent so far this year. The drop appears to have begun soon after China placed retaliatory 25 percent tariffs on imports of lumber and other wood products.
Many U.S. hardwood lumber firms have seen reduced demand, and have had to make cutbacks and eliminate jobs. Gutchess Lumber, Baillie Lumber, and Northland Corp. all told the Wall Street Journal that demand has decreased from the same time last year. Baillie and Northland have been forced to lay off workers. Gutchess reduced overtime and suspended 401(k) contributions.
“Across our industry, the trade dispute has drastically decreased demand for U.S. produced hardwood,” Northwest Hardwoods said in a statement. “As China looks to other countries with less regulated and sustainable hardwood supplies to meet market demand, supply chains may be permanently disrupted.”
China helped hardwood exporters during the 2008 financial crisis, writes WSJ, as Chinese customers kept buying oak and ash in large quantities. It remains the top export market, particularly for higher-grade wood like oak and cherry. Now, as the Chinese economy slows, U.S. firms are feeling it.
“Were we relying too much on East Asia and China? Of course we were,” Northland chief executive Orn Gudmundsson told the Journal. “But there were no viable alternatives.”
The tariffs are polarizing. Northwest Hardwoods chief Nathan Jeppson and other executives believe they've been disastrous for the U.S. economy. Others acknowledge they're hurting right now, but believe they're necessary long-term. 67 percent of recently-polled Wisconsin manufacturing executives said they support the tariffs even though tariffs are hurting their businesses.
Northwest Hardwoods has 28 locations, and it says it's the nation's largest North American hardwood supplier. The company celebrated its 50th anniversary in 2017.
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