Government Affairs: No End to Trade Action
On October 30, 2025, President Donald Trump and Chinese President Xi Jinping agreed to a framework trade deal between the two countries that will, among other things, result in China resuming purchase of U.S. hardwood logs and other agricultural products. At press time, full details of the agreement had not yet been released and are not reflected in the below article.
International trade and tariff policy continue to dominate the air space in Washington, D.C. well into 2025. President Trump campaigned on a platform promising heavy use of tariffs as leverage in forging trade deals with our trading partners around the world and he has been good to his word in the first year of his second term. The Hardwood Federation team has been busy all year on a number of fronts in the trade and tariff space, from developing and submitting comments on trade investigations to raising awareness among members of Congress and the administration about the need for sector-specific relief from retaliatory trade practices.
One of the president’s favorite, and least understood, methods of addressing his trade concerns are the Section 232 investigations and the actions resulting from them. Created by the Trade Expansion Act of 1962, Section 232 refers to a provision in that statute that empowers the president to impose duties on foreign imports if the Department of Commerce concludes, after officially investigating, that imports impact the national security of the United States.
Significant duties have resulted from multiple 232 investigations on a number of commodities ranging from steel and aluminum to copper to pharmaceuticals. In the forest products space, the president signed an executive order in March 2025 kicking off a 232 investigation into imports of “timber, lumber and their derivative products.” Released in late September, the Department of Commerce’s report to the president regarding lumber and derivatives found that “present quantities and circumstances of wood product imports are resulting in persistent threats of closures of wood mills and disruptions of wood product supply chains” and that “wood production in the U.S. remains underdeveloped.” It went on to allege that foreign subsidies and unfair trade practices have eroded U.S. competitiveness and disincentivized investment in domestic production.
As a result, a 10 percent tariff on softwood lumber took effect on October 14. Also kicking in as a result of the investigation is a 25 percent tariff on upholstered wooden furniture and kitchen cabinets. On January 1, kitchen cabinets will see an increase to 50 percent. Tariffs on wood products from the UK will be capped at 10 percent, while Japan and the EU face a 15 percent tariff ceiling.
Hardwood products are not specifically included in the main finding outlined above; however, it has been noted in the decision annexes (supplemental documents to the main text) some tariff product codes related to the flooring industry previously excluded from tariffs are now subject to the country specific reciprocal tariffs announced in April. Some product codes are also included in the “Potential Tariff Adjustments for Aligned Partners” (PTAAP) annex issued along with the Section 232 decision, which outlines goods that could potentially be subject to lower tariffs in the context of reciprocal trade negotiations. However, inclusion in the PTAAP annex does not necessarily equate to an immediate exclusion from 232 tariffs. The PTAAP process is focused on negotiating reciprocal tariff reductions through specific trade agreements with individual trading partners and is separate from the Section 232 national security actions. It is a complicated situation and until further clarification is issued, it may continue to be difficult to figure out exactly what is subject to tariffs and what is not. Continuing negotiations under the U.S. China agreement noted above could provide more context.
In addition, the 232 decision includes a provision allowing for duty drawback. This means if you import a product listed in the annex of goods subject to the Section 232 tariffs, but have contributed exported material or inputs to that product before importation, you may be eligible for a refund of the duties paid (a drawback). The specific details, such as eligibility requirements, documentation standards, and how to establish the necessary linkage between import, export, and re-import, will be outlined in forthcoming regulations or guidance issued by U.S. Customs and the Department of Commerce.
The investigation calls upon Commerce to report to the president by October 1, 2026, on the need for tariffs on hardwood products. This is an opportunity for the hardwood sector to weigh in on further action. The Hardwood Federation will be polling member associations to assess what we should recommend to the administration.
The Hardwood Federation submitted comments to the Department of Commerce’s Bureau of Industry and Security as part of this process. In these comments, we distinguished between hardwood and softwood and discussed trade barriers like the EUDR as well as the need for support for our industry, including increased government procurement of U.S. hardwood products and direct financial assistance to support domestic mills and manufacturers impacted by trade actions. We look forward to providing additional comments as details and further action, particularly related to hardwood products, are determined. We will be working closely with the NWFA as we craft our submission.
Dana Lee Cole is the executive director at the Hardwood Federation, a Washington, D.C.-based hardwood industry trade association that represents thousands of hardwood businesses in every state in the United States and acts as the industry advocacy voice on Capitol Hill. She can be reached at dana.cole@hardwoodfederation.com.