U.S.A tariffs disrupt global forestry trade pattern

Currently, the global trade pattern is being reshaped at an accelerated pace due to escalating tariffs and geopolitical tensions.

In 2018, the Trump administration introduced a series of trade measures that altered the export environment for wood, paper, and pulp. This development is widely regarded as one of the most significant shifts in international trade in recent years, as the cumulative effect of tariff barriers and retaliatory measures is rapidly reshaping the market dynamics of the industry.

It is worth noting that different tariff rates apply to various segments of the forestry industry: pulp exports still enjoy zero-tariff treatment; paper, paperboard, sawnwood, and softwood are subject to a 10% tariff rate; and other wood products under HS44 category are required to pay a 15% tariff.

Meanwhile, the United States has imposed high tariffs on several major trading partners. Canada faces a 35% tariff rate, but some products are exempted under the USMCA; Brazilian paper and paperboard are subject to tariffs as high as 50%; and China continues to bear the brunt of high tariffs. 

As for Europe, the United States initially imposed tariffs of up to 30% on EU goods, which were later reduced to 15% after negotiations. Although there has been a reduction, the future level of tariffs and the conditions for their application remain uncertain. Even if products are exempted from tariffs, trade activities still face multiple constraints such as rising supply chain costs, currency fluctuations, and weak demand.

In addition, the risk of trade diversion cannot be ignored. If exporters from Canada or Brazil face higher tariffs, they may turn to other markets, thereby intensifying competition in the European market. 

It should be noted that apart from tariffs, the United States is also advancing multiple investigations, the results of which may lead to more trade barriers. Among them, the Section 323 investigation into the import of wood and its national security implications is ongoing, and the conclusion of the investigation may serve as the basis for further imposing tariffs on wood products. 

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