Tariffs on US Hardwood Lumber Will Limit International Markets in 2025

*The proposed EU tariffs target limited products, roughly only 10% of our total hardwood exports to Europe by value

Tariffs have been a major focus of the second Trump administration, and as in his first term we have seen other countries retaliate with their own tariffs on US manufacturing and agricultural products. Canada was the first to announce a 25% tariff on US lumber in March, and in the aftermath of “Liberation Day” on April 2nd, China and Europe announced retaliatory tariffs as well. With a potential tariff of 25% to Europe and Canada, and 125% to China, 54.4% of our total hardwood lumber exports in 2024 could be subject to tariffs in 2025. The dollar value of these export markets last year was over $970 million. Depending on how the next few months shake out, these tariffs could be removed or we could have a ballooning trade war that results in retaliatory tariffs to other markets like Mexico and Vietnam.

After the United States imposed tariffs on Canadian steel and aluminum in March, Canada responded immediately with a 25% tariff of their own on US appliances, apparel, motorcycles, and ag products including lumber. Canada has been one of our best trading partners for decades, and this steep tariff will significantly impact trade flows and market viability for American hardwoods. As of April, there is no additional tariff on Canadian (or other) lumber coming into the United States, but that could change soon. The Trump Administration’s Executive Order 14223 on Expansion of American Timber Production and Section 232 investigation of foreign timber sources could lead to some sort of additional tariff on wood and wood products coming into the country.

While other US tariffs have been “paused” at 10%, the tariffs on China remain at a staggering 145% (20% plus an additional 125%). When the US first put a 20% tariff on China in March, they retaliated by banning imports of US logs and directly targeting manufacturing sectors for tariffs. After the “Liberation Day” announcement on April 2nd that imposed an additional 34% tariff on China, the tariffs on US products matched those increases across the board on all products from the US. Tariffs increased on both sides to 84%, then finally 125%, where China has announced that “…at the current tariff level, there is no market acceptance for US goods exported to China”. Unless removed, these tariffs will be applied to any US product arriving in China after May 13th. This extreme tariff has effectively shut the door on exporting hardwoods to our largest market, and while tariff increases on other markets have been paused for negotiation, the tariffs on China remain. The administration is taking a hardline approach to trade with China, and our industry will be upended while waiting for a deal.

In 2024, the United States exported an average of nearly 35 million board feet of lumber a month to China. While these tariffs are in effect, all that lumber will have to find a new home. Fortunately, American industry appears to be putting pressure on the administration, as evidenced by the walkback of tariffs on smartphones and computer chips from China. Hopefully, the trade dispute is short-lived and we can regain access to our largest market quickly.

Fortunately, not all our trade with the EU is subject to the 25% tariff. After a comment period, the European Commission refined their proposal to exempt several US hardwood species from tariffs, including oak, walnut, hickory, and yellow poplar. However, other species like beech, birch, ash, cherry, Populus, and maple, will be assessed a 25% tariff unless some agreement is made before the July 14th implementation date. This is still a setback for the growth of species like maple and cherry, which are heavily featured in AHEC promotions alongside red oak as “underutilized” species in Europe.

By Tripp Pryor, International Program Manager, AHEC