Joseph L. O’Donnell Director, Government & Public Affairs International Wood Products Association
We made it, folks. We survived another extremely contentious election season. Instead of the predicted days or weeks of uncertainty about the election’s outcome, President-elect Trump rode the support of several new or expanded blocs of voters to win the popular vote and a clear win in the Electoral College, 295-226. Additionally, Republicans will take control of the Senate and enough seats to control the House of Representatives as well.
Surely top of mind for Import/Export Wood Purchasing News readers, Trump has a long history of affection for taxing imports through increased tariffs. Indeed, during his first term he affectionately dubbed himself “Tariff Man.” Trump will retake the White House with ambitious plans for broad import tariffs, including 60 percent tariffs on goods from China, 25 percent tariffs on goods from Mexico, and 10-20 percent tariffs on all other imports. The duties, if fully imposed, would raise effective average U.S. tariff levels to 17.7 percent, the highest since 1934, according to the conservative-leaning Tax Foundation, trigger a one-time upward resetting of consumer goods prices, and likely prompt retaliatory duties from trading partners around the world.
While the U.S. Constitution explicitly grants the power to impose tariffs to Congress (Article 1, Section 8), Congress has delegated much authority to the President – authorities commonly known as Section 301 Relief from Unfair Trade, Section 232 National Security, the International Emergency Economic Powers Act. President Trump has previously shown that he is willing to use these authorities in novel ways and Congress has been largely unwilling to push back. With the expected one party control for the next session of Congress, we anticipate that they will be even less willing to push back going forward.
While Trump generally supports the increased tariffs as a way to fund the government and thereby offset reductions to federal income taxes, there is no question that he also loves using every lever at his disposal to extract an advantageous deal from America’s trading partners. The EU is reportedly already preparing a list of retaliatory tariffs on U.S. exports in hopes of spurring negotiations to head off an escalating trade war. There is little doubt that industries like ours that rely on globally-sourced products will have to deal with increased tariffs for a time and hopefully expansive new trade deals will be hammered out that alleviate that pain going in the coming years.
We at IWPA will work to minimize that pain as we continue to educate policymakers in the federal agencies and on Capitol Hill that internationally sourced wood products often do not compete directly with domestic wood products and are key inputs to U.S. manufacturers and valuable to U.S. consumers. That education and advocacy role will be more important than ever as we move into 2025.
If you import wood products and would like to join us in that work, please reach out to me and my colleagues at IWPA to discuss how you can join us in that work.
