Timber entering the world’s largest import market is now subject to tariffs under three separate US trade laws, with rates from 10 to 50 per cent depending on the product and where it was made. It comes as 25 US states urged the Court of International Trade in New York on Wednesday to strike down Donald Trump’s forced labour tariffs on goods from 60 trading partners.
“For many importers, the issue is not merely whether tariffs will increase, but whether the supply chain is designed to adapt if they do,” Gregory Husisian and three colleagues at US law firm Foley & Lardner wrote on Friday. They said a mix of national security and unfair trade tariffs is coming into focus, after the Supreme Court struck down Trump’s emergency tariffs earlier this year.
Softwood timber and lumber pay a 10 per cent national security tariff, which has applied to imports from every country since last October. Upholstered wooden furniture, kitchen cabinets, and vanities pay 25 per cent under the same national security law.
As it stands, most other wood from the 60 trading partners, including hardwood plywood and wooden tables, is subject to a forced labour tariff of 10 or 12.5 per cent. Trade Representative Jamieson Greer set the higher rate for Australia, New Zealand, China, and Vietnam, and left out Canadian and Mexican goods that qualify under their trade pact with the United States.
Certain wood products, eucalyptus among them, are exempt after Greer’s office was told that US producers cannot supply enough to make timber and crane mats. Softwood timber and lumber are also exempt, because Greer’s office left out anything already taxed under the national security tariff.
Canadian panels and paper face a third tariff of 50 per cent, which took effect under a 1930 trade law after talks with Canada broke down. Lumber was spared because it already pays the national security tariff, whilst 98 forest-product tariff lines were caught.
“No one ever conceived of the idea that you could just create a sort of a fake, bogus test for other countries,” Alan Wolff, who helped draft the law behind the tariffs, said before Wednesday’s hearing. Sara Albrecht, chief executive of the Liberty Justice Center, which represents two small importers in the case, called the tariffs a “blatantly pretextual” replacement for Trump’s earlier tariffs.
Greer’s office says the tariffs are already working, with six trading partners, including India, banning imports made with forced labour since he proposed them. His tariffs took effect the minute a temporary replacement for Trump’s emergency tariffs expired, so importers never had a break from the duties.
Hardwood timber and lumber could be next to join the national security tariff, with the Department of Commerce’s update on those imports due to Trump on Thursday. Any hardwood added would fall outside the forced labour tariffs, and outside the court fight over them.
Upholstered wooden furniture and kitchen cabinets face a bigger bill starting next year, when those national security rates rise to 30 and 50 per cent. Trump pushed the increases back by a year, citing “productive negotiations of agreements with multiple countries”, and any trading partner that strikes a wood products deal will be spared them.
Democrats have introduced a bill to repeal the law behind the Canadian tariffs and refund every duty paid, a month out from midterm elections that will decide who controls Congress. Any repeal would still need Trump’s signature or two-thirds of both houses, a margin the House missed when it voted 219 to 211 to revoke his earlier Canadian tariffs.
Maine Governor Janet Mills said last month that Democrats winning both houses would “throw a wrench in the works” for Trump. Congress could then “take back their power over taxation and tariffs,” she said.
