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Trump Launches Trade Studies; Holds on Tariffs
On January 20, President Trump issued his America First Trade Policy, an executive order (EO) outlining a large scale review of current global trade relations and impacts on the U.S. economy. The president did not immediately impose a raft of broad-based tariffs on U.S. trading partners as many anticipated. Instead, he authorized key departments, including Commerce, Treasury and the U.S. Trade Representative to conduct assessment of trade relations with leading trading partners including those specifically referenced during and following the campaign:
China: The EO calls for review of China’s compliance with the “Phase One Trade Deal,” the economic and trade agreement entered into by the U.S. and China in January 2020 which required increased purchases of U.S. products, including U.S. hardwoods by China. The EO further authorizes an investigation related to “practices by the People’s Republic of China (PRC) that may be unreasonable or discriminatory.”
Canada and Mexico: The America First Trade Policy also directs departments to examine the impacts of the U.S.-Mexico-Canda Trade Agreement (USMSCA) on American companies, service providers, workers, farmers, etc. and provide recommendations for future U.S. participation in the agreement.
External Revenue Service (ERS): The E.O. does not go as far as to establish an External Revenue Service to collect and distribute tariffs collected by the U.S. as has been floated in recent months, but it does require that Commerce, Treasury and others conduct a feasibility study of doing so.
Findings of the various studies are generally due by April 1, 2025, although some are due later that same month.
While the EO lays out a process for study, review and policy development, almost immediately following the signing of the document, the president reiterated threats to impose general tariffs on Canada and Mexico (25 percent) and China (10 percent) and noted concerns around trade with the European Union. While there may be a delay in the imposition of tariffs, clearly a foundation for doing so in the future, near or far, has been laid. This situation remains incredibly fluid and can change from day to day. The Hardwood Federation will continue to closely trace developments related to the evolving nature of the administration’s China trade policy and will be rolling out proposals to address adverse impacts on the industry in the near future.
NEPA Review Process Addressed
President Trump addressed permitting efficiency through an Executive Order focused on streamlining the National Environmental Policy Act (NEPA) permitting process. While primarily focused on permitting for energy projects, the EO could have implications for harvesting and thinning projects on Federal lands. Among other actions, the EO requires the White House Council on Environmental Quality (CEQ) and other permitting departments and agencies to review current permitting policies and eliminate unnecessary delays in issuing permits. As with some of the other orders signed earlier this week, this action will most likely face legal challenges. The Hardwood Federation will continue to assess the potential impacts on industry supply chains.
House Expected to Pass “Fix Our Forests Act”
Congress is also pushing for a streamlined permitting process. The House is scheduled to take up the “Fix Our Forests Act” (H.R. 471), a bipartisan bill which aims to reduce the amount of time it takes to process environmental permits for forest management projects. House Natural Resources Committee Chairman Bruce Westerman (R-AR) and Rep. Scott Peters (D-CA), who are leading the bipartisan charge on the bill, cite the growing threat of wildfires as a key motivator for pushing the legislation. The bill is expected to pass the House with a strong, bipartisan vote.
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Source: Hardwood Federation