Everywhere you look, news of the United States’ trade war with China is blasted across newspapers, radios and television. The negotiations and current news cycle leave most Americans waiting and wondering what will happen next. While costs may rise for a variety of goods and services, the hardwood industry is one of many looking at a disconcerting future.
The trade talks, which were conducted by high level players in both the US and China, appeared to be moving towards a resolution after months of negotiations and deliberating. Unfortunately, both sides felt they had given more than was their fair share, and were unable to reach an agreement.
It is said that the Chinese appeared to walk out on some of the concessions offered and were unwilling to put said promises in writing to create an enforceable contract. News has also broken that they were reluctant to make agreements that would require China’s legislature to make changes to current laws. As a result, the Trump administration increased tariffs originally lowered on good faith to a staggering 25% on all listed Chinese goods.
Dana Lee Cole, executive director of the Hardwood Federation, summed up the dilemma saying, “The US Hardwood Lumber industry has a heavy reliance on export markets for its survival, and is being devastated by the ongoing trade dispute with China. Domestic mills have suffered sharp declines in export sales. Operations have been shuttered. Jobs lost. Communities, reliant on good paying hardwood jobs, ruined.
Prior to the tariff raise on May 10th, hardwood exporters lost $153 million per quarter, due to the smaller (but still significant) 10% tariffs imposed by China. This raise in tariffs is expected to create huge losses in the long-term export markets that are essential to the future of the hardwood industry.
According to a recent economic impact study conducted by the Washington D.C.-based Hardwood Federation, the U.S. hardwood products industry adds $348 billion annually to the economy. Additionally, hardwood producers and manufacturers directly support more than 685,000 jobs in 25,000 facilities, generating $35 billion in annual income. These jobs, companies and the economy are at risk due to the rising tariffs.
Unfortunately, the hardwood industry was not included in the announced $16 billion relief package as on the growing communities (such as cotton) were considered, rather than producers. The Hardwood Federation has advocated for the industry by sending a letter (which can be viewed here) to the US Department of Agriculture asking to be included in agriculture industry relief measures.
If you would like to help assist in these efforts, we suggest all members of the industry reach out to their members of congress to urge them to work with the USDA regarding relief measures. You can find a list of your local representatives here. In the meantime, Millwood will continue to offer the same quality products and customer service you deserve and expect.