Hardwood Federation Trade and Tariff Update

The last few weeks have been extremely busy ones for the Hardwood Federation as the impacts of the Trump Administration’s trade actions against China have hit home with hardwood companies. Below is a brief history of the current trade dispute, an update on the various trade issues the Hardwood Federation is following, actions taken, and how you as a business leader can take action.

China Trade and Tariffs-Background

In 2017 the Trump Administration undertook an investigation of Chinese business practices related to technology transfer, intellectual property, and innovation. The Office of the U.S. Trade Representative (USTR) found that current and past Chinese practices have caused significant harm to American businesses, confirmation of longstanding concerns that are bi-partisan and shared by other countries.

As a result of these findings, the Trump Administration chose to initiate a series of tariffs on Chinese goods exported to the U.S. They announced that lists of products to be targeted would be issued over the next several months. Public comment would be taken on each list after its release and before final implementation of the tariffs.

The Chinese responded that they would respond to imposition of tariffs with equal and reciprocal tariffs on U.S. goods of exported to China.

To date, tariffs on the first two lists of goods proposed by the U.S. government have been put into place or are scheduled for implementation. By August 23, 25 percent tariffs will be levied on a total $50 billion worth of Chinese imports.

A third list of proposed Chinese imports targeted for tariffs was announced in July. China issued a corresponding retaliatory list on August 3. Although hardwood and hardwood products are not on the first two lists, they do appear on the third set of lists issued by the U.S. and China in this ongoing dispute. View the Administration’s third list of targeted Chinese exports here.

China’s retaliatory list of agricultural products may be viewed here. Forest product numbers begin with 44 and start on page 11. Most U.S. hardwood lumber falls within the 25 percent category with a few exceptions. There is still some confusion concerning exactly which species fall where as there appears to be two “other hardwoods” categories, and AHEC is seeking clarification through their official channels. The Chinese have announced that the tariffs will be implemented “immediately” if the U.S. implements the proposed tariffs on $200 billion in Chinese goods on List 3.  (This mirrors their response to final implementation of the first two lists.) The anticipated date for U.S. action (to impose or not impose tariffs) is October 1, 2018.  It is almost certain that China will reciprocate by imposing their tariffs within one or two days of U.S. action.

Taking Action

The Hardwood Federation is reaching out to the Administration, Congressional Leaders, and the trade community in Washington D.C. to share the hardwood industry’s experience. But it is vital that business owners, employers and employees also make their voices heard.  Below is a list of how you can take action.

Administration Outreach
Contact Administration Officials at the following e-mail addresses:

Submitting Comments to the Administration
Companies can provide their comments directly to Commerce for the public record at the below website. https://www.federalregister.gov/documents/2018/07/17/2018-15090/request-for-comments-concerning-proposed-modification-of-action-pursuant-to-section-301-chinas-acts

Congressional Outreach
It is vital that Members of Congress hear directly from their constituents.

Contact House and Senate Members via email:
https://www.votervoice.net/THF/Surveys/4697/Respond

Members of the House and Senate will be in the home states during much of August…take the opportunity to meet with them in-State of attend a Town Hall Meeting. Find contact information for state offices here: https://whoismyrepresentative.com/

Share Your Story
Tell us how the trade dispute is impacting your company at the below link: https://www.votervoice.net/THF/campaigns/60209/respond

Engage with State and Local Business Organization
Make sure your state and local industry and business groups are aware of how your company is being impacted and become involved. Many local and state industry associations are planning meetings with Members of Congress…make sure you attend them and voice your concerns!

Hardwood Trade Statistics

Keep in mind, the most important thing you can share with your elected officials and the Administration is how this trade dispute is directly impacting your business and your ability to employ workers. Below are some additional facts about the importance of the hardwood industry to the U.S. economy to supplement your message.

  • The wood products industry in the U.S. is an important contributor to the U.S. economy, accounting for approximately 4 percent of the total U.S. manufacturing GDP.
  • Wood products companies are among the top ten manufacturing sector employers in 47 states, producing $210 billion in products annually.
  • The industry employs nearly 900,000 people; more than the automotive, chemicals and plastics industries. And most of them are in rural areas where employment opportunities are limited.
  • Hardwood is an important sub-sector of the wood products industry and has a heavy reliance on export markets for its survival.
  • In 2017, U.S. hardwood producers shipped $4.04 billion worth of U.S. products to global markets; $2.09 billion to Greater China, including Hong Kong and Macau;
  • Combined, China, the NAFTA countries and the E.U. make up 82% of hardwood exports. As should be clear, dependable, long-term export markets are vital to the sustainability of the hardwood industry.
  • In 2017, the U.S. had a trade surplus of $1.475 billion in hardwood lumber, up from $1.1 billion in 2015.
  • It is vital that markets remain open for these businesses and the men and women they employ,

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