More than US $50 billion worth of lumber and other forest products could get much more expensive after Donald Trump announced plans for a global tariff of 25% on all products imported into the United States “over the next month or so.”
Speaking to reporters on Air Force One, Trump said the tariffs would take effect from April 2nd – in time for the start of the Spring season – and will concinde with others duties placed on imported cars, semiconductors and pharmaceuticals.
According to Trump, the new tariffs will generate huge revenues for the United States – the world’s leading consumer of industrial roundwood and the second largest consumer of sawn wood, wood-based panels, and paper and paperboard.
The new threat comes weeks after the president threatened to hit Canadian and Mexican lumber – which makes up 46% of the US total imports – with tariffs over concerns about illegal migration, fentanyl and trade: “I’ll be putting the tariff of 25% on Canada, and separately, 25% on Mexico, and we’ll have to do that.”
“We have all the oil we need, we have all the trees we need, meaning the lumber.”
President Trump last month threatened to hit Canadian (and Mexican) lumber with tariffs – before agreeing to a 30-day pause with Candian Prime Minister Justin Trudeau on February 4th.
Report: Trump’s Tariffs to Add Billions to Cost of Timber Products
In December, the Peterson Institute of International Economics reported that Trump’s tariffs would add billions to the price of timber products. Calculating the impact of tariffs, the institute said that potential tariffs of 60% on Chinese imports, 25% on USMCA partners like Canada and Mexico, and 10% on all other nations would have major implications for the global trade of forest products:
“That’s because there is no such thing as a free trade tax,” according to a report prepared by Julieta Contreras, Mary Lovely and Jing Yan, who warned that low-income Americans would be hit hardest by the tariffs, which will add at least $25 billion to the cost of timber imports alone.
The report also revealed that forest products, which are subject to near-zero tariff rates across the vast majority of countries where the US has free trade agreements, will be among the industries hardest hit by tariffs revealing that the tariff on Chinese furniture and plywood will jump from 16.2% to 60%, while tariffs on more than US $3 billion worth of Canadian softwood lumber jumping from 14.54% to 25%.
Already China – which trades more than US $10 billion in forest products with the United States – is looking to “Trump proof” its economy ahead of a potential trade war with CCP officials pledging to stabilise it’s stock and real-estate markets—which have seen lumber and log imports drop over the past 12 months—while also preparing for “external shocks,” including potential trade wars with the incoming Trump administration and Russia.
- To learn more about the impact of Donald Trump’s tariff plan on global timber prices, click here for Wood Central’s special feature.
