DHA eNews - Court Upholds Section 301 Tariffs On China
Trade issues continue to be hot topics in our industry. Last week the U.S. Court of International Trade upheld the 25% Section 301 tariffs on Chinese hardwood plywood and multilayered wood flooring, among other products. This is an important win for many DHA members who participate in coalitions for both products.
Imports of hardwood plywood and engineered wood flooring are both off to a slow start this year after significant increases last year. Both segments are likely working off large inventories from last year's high imports and facing declining demand as construction slows in the U.S.
With trade such an important issue, we are looking forward to hearing from attorney Tim Brightbill who represents both the Coalition for Fair Trade in Hardwood Plywood and American Manufacturers of Multilayered Wood Flooring at the DHA Annual Meeting in May. We look forward to seeing you there.
If you have questions or comments, contact me. I look forward to hearing from you.
Keith A. Christman, President
Decorative Hardwoods Association
Last week, a three-judge panel at the U.S. Court of International Trade upheld Section 301 tariffs on China, rejecting a massive lawsuit filed on behalf of 3,600 importers. The Court found that the U.S. Trade Representative supplied the needed explanation to support imposing the tariffs. This means that the additional 25% tariffs on hardwood plywood and multilayered wood flooring imported from China will remain in place. The U.S. Trade Representative is still conducting its legally required four-year review.
The value of U.S. imports of hardwood plywood dropped by 69.6% as volume fell by 67.7% in January vs. one year ago. Imports rose by 12% in value in 2022 to more than $2.1 billion. Imports from Indonesia, the top source, sank by 59.9%. Imports from Vietnam and Russia fell by 86.3% and 82%, respectively.
After increasing by 11% in 2022, the volume of U.S. imports of multilayered wood flooring fell by 26% in January vs. one year ago. Vietnam and Cambodia remain the two largest import sources, overtaking China. Vietnam, Cambodia, and China comprise 28%, 20%, and 17% of imports by volume, respectively. Imports from Vietnam grew by nearly 20%.
The Inflation Reduction Act and the Bipartisan Infrastructure Law, designed to cut greenhouse gas emissions, include funding that can benefit the wood products industry. Grants are available to help fund renewable heat generation technology, switching to alternative fuels, and increasing the energy efficiency of industrial processes.
Last year, the U.S. and EU restricted trade with Russia. In the face of those restrictions, the timber relationship between China and Russia grew stronger. Economic indicators—including a very small decrease in tariffs—suggest that China's economy may focus more on consumption than investment. Due to these factors and more, expect greater uncertainty in the global wood products market in 2023.
Vietnam's exports of wood and wood products, including furniture, dropped by 34.8% in January and February vs. the same months last year. The decrease was driven by lower demand.
The U.S. cabinet industry started the year with an increase in sales of 6.5% in January vs. one year ago, according to KCMA's monthly survey. Reported volume, however, declined by 14.4%.
A top global furniture manufacturer is acquiring a key competitor: HNI will buy Kimball International for about $485 million. The transaction is expected to close by midyear.
The FDMC 300, a list of the largest North American manufacturers of wood furniture, cabinets, and other wood products, grew significantly in 2022. Total sales increased by 18.7% to $74.1 billion.
Earlier this month, the newly formed House Committee on Agriculture Subcommittee on Forestry held a hearing focused on stakeholder perspectives of Title VIII of the farm bill, the title on forestry. The formation of the committee underscores the need to invest in forest management as wildfires continue to worsen and highlights the importance of the forestry title in the farm bill, which is up for reauthorization. DHA is working with industry allies, including the Hardwood Federation, on opportunities for the industry and our members.
The forests in Maine already absorb about 70% of the state's fossil fuel emissions each year. A new study shows that forest owners could increase annual carbon storage by at least 20% over the next 60 years while maintaining timber harvest levels.
A lawmaker joined a group of 100 loggers, timber owners, and students to voice their opposition to Oregon's plan to manage 600,000 acres of state , arguing that this would cause a drop in logging and timber industry jobs. The controversy is centered on the habitat conservation plan, a plan to help manage Oregon's state forests for the next 70 years, that is being written by the Oregon Department of Forestry.
Deforestation in Brazil’s Amazon soared by 62% in February. This is the highest level of deforestation recorded since tracking by a space research agency began in 2015.
According to investigators, large yachts are frequently outfitted with illegally sourced timber. The Environmental Investigation Agency found that approximately 40% of teak imports from Myanmar, a country plagued with illegal teak logging, are used for luxury yachts.
Warmer winters mean a shorter harvest season for Maine's timber industry. An experienced logger noted that Maine's logging season is typically 12 weeks long. However, as springtime weather gets warmer, the resulting mud can cut the logging season dramatically, to a total of only 4–6 weeks.
The European Parliament approved stricter national targets to cut emissions in key sectors and to expand carbon-absorbing natural ecosystems like forests. These two laws are part of a major package of climate change laws.
European firms are scaling up prototypes and early versions of wood-based wind turbines. If successful, this would make wind-powered renewable energy more environmentally friendly, as wood turbines are lightweight and avoid the challenges that steel, concrete, and plastics create at the end of their useful life.
An early U.S. president had a home with "forest" in the title. Who was the president, what is the full name of the home, and where is it located?