President Trump Imposes Tariffs
(Editor’s Note: As new information continues to be released from the Trump Administration, be advised of this important update from the Hardwood Federation (HF): On Thursday, January 30, President Trump announced to reporters that he would follow through on his threat to impose 25 percent tariffs on imports from Canada and Mexico on Saturday, February 1, citing the flow of fentanyl and large trade deficits as among the reasons for his decision. President Trump has since postponed the date in which the tariffs will take effect to March 1, for Canada and Mexico. The HF noted this could have significant impacts on the U.S. hardwood industry in terms of both lumber and logs exported to both countries as well as supplies and machinery used in logging, mills, yards, and other operations. He also reiterated threats to impose tariffs of unknown proportions on China and the European Union.)
At press time, the most current information regarding the proposed tariffs by the Trump Administration was reported as follows:
On February 14, President Trump announced that the Administration, through the U.S. Trade Representative (USTR), Department of Commerce and other agencies, would move forward with reciprocal tariffs on a country-by-country basis, avoiding what he characterized as a “one-size-fits-all” approach to trade arrangements. The anticipated action will follow submission of agency reports, analyzing what the extent of trade imbalances between the U.S. and specific trading partners are, according to Administration officials. After submission of the reports, which are due April 1, the White House directive orders federal agencies to “initiate … all necessary actions to investigate the harm to the U.S. from any non-reciprocal trade arrangements adopted by the trading partners.”
Canada and Mexico:
Even though Canada and Mexico are subject to the product-specific tariffs on steel and aluminum (announced February 10 to go into effect March 12), imposition of broader 25 percent tariffs on imports from Canada and Mexico continue to be on hold until March 1. Both countries have promised retaliatory action should tariffs move forward. Canada’s retaliatory list includes a 25 percent tariff on wood and products from the U.S. including hardwoods.
China:
10 percent tariffs on Chinese imports to the U.S. went into effect on February 1, prompting retaliatory tariffs on a limited set of products from China, which went into effect on February 10, reported the HF. So far, an expected conversation between President Trump and Chinese President Xi has not yet taken place at the time of this writing.
Hardwood Impacts:
Currently tariffs on U.S. hardwood exports, if they exist at all, tend to be low, but retaliatory actions could impact the U.S. hardwoods going forward. Although there are examples where tariffs do help level the playing field for U.S. manufacturing, including for downstream hardwood products like hardwood plywood and kitchen cabinets, a significant percentage of the industry continues to be extremely concerned about the potential impacts of retaliatory tariffs on hardwood exports, particularly those headed to our major trading partners, including China, Canada and Mexico.
Reciprocal tariffs usually refer to measures taken by both parties to ensure fairness in bilateral commerce. The goal is to offset not just a trading partner’s own tariffs on U.S. goods, but also other factors deemed to put American manufacturers at a disadvantage, such as subsidies to businesses that are seen as unfair, regulations, value-added taxes (VATs), exchange rates and lax intellectual property protections. These so-called “non-tariff barriers” can be hard to quantify.
Reciprocal tariffs could be imposed in a number of ways, noted HF: they could be applied to specific products, to entire industries or as an average tariff on goods arriving from a specific country.
The HF Team continues to be active on the Hill alerting industry allies in Congress to the potential impacts of retaliatory tariffs on the industry and sharing HF’s proposed relief measure. Now that the Agriculture Department Secretary is confirmed and in place, HF hopes to have more information about who to contact within her office, noted the Hardwood Federation.
For more information, visit www.hardwoodfederation.com.
