Report: Trump’s Tariffs Will Add Billions to Cost of Timber Products

SEATTLE (Scrap Monster):  Just how much will the price of lumber go under Trump’s tariff plan? That is the question posed by the Peterson Institute of International Economics, which revealed that the president-elect’s plans to tariff Chinese, Canadian and Mexican goods “on day 1” will add billions to the price of timber products.

According to a new analysis prepared by the institute, tariffs of up to 60% on Chinese imports, 25% on USMCA partners like Canada and Mexico, and 10% on all other nations will have significant implications for the $50 billion trade in imported wood products: “That’s because there is no such thing as a free trade tax,” according to a report prepared by Julieta Contreras, Mary Lovely and Jing Yan, who warned that low-income Americans would be hit hardest by the tariffs, which will add at least $25 billion to the cost of timber imports alone.

“A tariff of 60% on China would be a major shock to international goods markets,” the economists said, adding that after the 2018–19 China-US trade war, “62% of US imports from China are subject to an average tariff rate of 16%, far below the rate promised by Trump on the campaign trail.”

The report also revealed that wood products, which are subject to near-zero tariff rates across the vast majority of countries where the US has free trade agreements, will be amongst the industries most exposed to the tariffs: The tariff on Chinese furniture and plywood will jump from 16.2% to 60%, while tariffs on more than US $3 billion worth of Canadian softwood lumber jumping from 14.54% to 25%.

On Monday, Wood Central revealed that China – which trades more than US $10 billion in forest products with the United States – was looking to “Trump proof” its economy ahead of a potential trade war. Announced last week as part of the Central Economic Work Conference, CCP officials have pledged to stabilise the stock and real-estate markets—which have seen lumber and log imports drop over the past 12 months—while also preparing for “external shocks,” including potential trade wars with the incoming Trump administration and Russia.

Courtesy: www.woodcentral.com