DHA eNews - Tariffs On Russian Birch May Rise To 50%
Russia's tragic war in Ukraine and its impact on the hardwood products industry and trade dominate this week's headlines. As previously reported, Russia was the third-largest source of U.S. hardwood plywood imports in 2021, exceeding 567 million square feet worth more than $334 million. In addition, more than 653 million square feet of birch plywood was imported from Vietnam last year—much of it using birch from Russia. Long‑lasting trade impacts could result from legislation passed last week in the U.S. House of Representatives that would end "normal trade relations" with Russia and increase tariffs on imports of birch plywood to 50%. This creates challenges for importers and potential opportunities for domestic manufacturers.
Trade is on the agenda at DHA's annual meeting. I encourage you to register early.
If you have questions or comments, contact me. I look forward to hearing from you.
Keith A. Christman, President
Decorative Hardwoods Association
The U.S. House of Representatives passed legislation that would end normal trade relations with Russia. The result is that tariffs on Russian birch plywood would increase from zero to 40–50%. The Senate is likely to take action quickly, followed by President Biden signing the bill into law. Tariffs would go into effect immediately.
Ten percent of U.S. hardwood plywood in 2019 was directly supplied by Russia. Indirectly, Russia may account for 20% of U.S. hardwood plywood consumption, as plywood manufactured by major producers like Vietnam and Indonesia may use logs harvested in Russian forests. Furthermore, Russian plywood may use illegal timber and be subject to penalties under the Lacey Act.
A recent analysis shows that powerful industry barons connected with President Vladimir Putin are behind Russia's largest logging companies and exporters of wood products. These oligarchs include Russia's richest man, a former member of Russia's lower house of parliament, and the owner of the Chelsea Football Club, Roman Abramovich.
Russia's Ministry of Industry and Trade proposed introducing a ban on the export of birch wood, plywood logs, and fuel chips to "unfriendly countries" by the end of 2022.
Experts predict that ocean shipping rates could double or triple due to the Russian invasion of Ukraine. Shipping rates could surge from $10,000 per forty-foot container to $30,000, while air freight rates might spike even higher.
The Forest Stewardship Council confirmed that it has suspended trading certificates from Russia and Belarus, per its provision that "the forest sector is not associated with violent armed conflict, including that which threatens national or regional security and/or is linked to military control."
Russian birch plywood is a high-end product commonly used as a substrate in engineered wood flooring, hardwood plywood, furniture, and kitchen cabinets. For those looking for a new platform, Capital Testing can help evaluate potential replacements.
Trade will top the agenda of the Decorative Hardwoods Association 2022 Spring Conference and 101st Annual Meeting, held in Nashville from Monday, May 16, to Wednesday, May 18. Industry experts will talk through their forecasts and share insights on the trade, economics, and marketing of decorative hardwood products.
Plans to cut down Ukrainian forests were outlined in a letter written by Russian Defense Minister Sergei Shoigu. He stated that timber that is not used for the needs of the Armed Forces of the Russian Federation should be sold and the proceeds used to fund the occupying army.
The Amazon rainforest appears to be close to the critical point where the biologically rich and diverse ecosystem could change into a grassy savanna. Concerned scientists say that about 75% of the rainforest is demonstrating "resilience loss:" significantly less ability to recover from droughts, logging, and fires.
The Oregon legislature recently passed the Private Forest Accord following intensive negotiations between Oregon timber owners, including DHA member Roseburg, and conservation groups. The historic agreement is a comprehensive set of updates to forest management practices.
The Colorado State Forest Service's 2021 Report on the Health of Colorado’s Forests emphasized the fragility of the state's forests as drought compounds the damage done by beetles. This situation challenges the long-term sustainability of about 24.5 million acres of forests.
Finland is the first county in the world to train dogs to sniff out the Heterobasidion fungus in spruce and the rust fungus in pine. Early detection would help fight and contain the pathogens before the damage becomes widespread.
Finland is working on developing the technology and testing how a swarm of drones, bolstered with artificial intelligence, could be used to detect and prevent forest fires. More than one million acres of forests were burned in 2019.
A survey of small business owners in February and March showed that only 29% have fully recovered from the impact of the pandemic. 42% are still earning less than their pre-COVID revenues.
What and where is the tallest living hardwood tree in the world?