The U.S. trade tariffs are having significant impacts on the wood industry in the U.S.
The impacts have been rather complex, but we will briefly examine them here.
In November 2017, the U.S. government levied a tariff on Canadian hardwood. This tariff was announced as a way to help American lumber producers. The argument was that the Canadian competitors had an unfair advantage over the U.S. lumber producers. The tariff was then put into place in order to assist lumber producers in the U.S.
The tariff resulted in an overall increase in the price of lumber in the U.S.
Reports have shown that the prices have remained high since that time. As a result, many people in the lumber industry have benefited from the higher prices.
At the same time, though, manufacturers who rely on the lumber have been hurt by the rising prices. National reports state the price of building a new home rose by 7 percent due to the increased lumber prices.
Other industries that rely on lumber have also seen increases in costs of materials. This includes the manufacturers of flooring, cabinets, furniture and other wood products.
Impact of the trade tariffs related to the Chinese market
The U.S. trade war with China has also had a significant impact on the wood industry.
The U.S.. government announced tariffs related to China in 2018, and China then responded with tariffs of its own. Additional tariffs were announced by the U.S. government in 2019.
According to this Washington Post article, during a six-month period, U.S. exports to China declined by $18.4 billion. This is compared to the year previous, and is a drop of 26 percent.
That decline includes a drop in wood exports to China. According to the Washington Post article, the wood exports to China declined by $700 million over the six-month period. This change impacted a wide range of businesses, including sawmills.
Many sawmills have been significantly hurt the rising lumber costs and then the decline in the international market for lumber.
The wood industry has worked to make inroads into other international markets. The decline in sales to China, though, is a lot to overcome.
While the tariffs have brought about numerous changes in the wood industry, no one knows what will happen next. If you have questions about the tariffs, we encourage you to talk with the experts here at Ohio Wood Products.