US Lumber Companies Favor Section 232 Tariffs; Manufacturers Concerned, Foreigners Aghast

The comments come after the Commerce Department asked for public input on the effects on U.S. national security of imports of lumber, timber and "their derivative products." The Section 232 investigation began after Trump directed the department to investigate threats to national security (see 2503030039).

Domestic lumber companies hailed the possibility of further tariffs on lumber products (softwood lumber from Canada is already covered by antidumping and countervailing duties), with the U.S. Lumber Coalition saying that it is "critical" for the Trump administration to impose "additional Section 232 tariffs on imports of softwood lumber products" into the U.S. The coalition argued that "such tariffs must be sufficiently high and must remain in place for a sufficient duration" so that the U.S. lumber industry has relief from the "harm" caused by foreign lumber imports.

Canada's lumber industry in particular was to blame for the harm to U.S. lumber industry, the coalition said, with "Canada’s excess capacity being off-loaded in the U.S. market at the expense of domestic producers." It argued that U.S. domestic suppliers were "ready to step up to meet the national security needs" of the U.S. "in the absence of unfairly traded Canadian lumber."

The National Hardwood Lumber Association disagreed, however, saying that its members were dependent on export markets and vulnerable to retaliatory tariffs by foreign countries. Instead, it urged the administration to "target foreign-manufactured, low-cost, wood-lookalike products that displace American-made, renewable hardwood."

Other lumber companies disagreed, with the Swanson Group, a domestic producer in Oregon, saying that additional trade remedies in the lumber market will help "transition the United States to a fully self-supplied wood products market," and Fox Lumber arguing that if lumber and wooden pallet producers are "not protected from the unfair trade practices" that the U.S. and its armed forces will be "dependent on Canada for pallets."

The Government of Canada vehemently disagreed, however, saying that, "in fact, the opposite is true -- imports of wood products from Canada support U.S. national security." Canada also argued that Section 232 was an inappropriate avenue to apply remedies, "even under the most expansive conceivable interpretation of 'economic welfare,'” but even so, that U.S. domestic lumber is "thriving" and does not need protection from Canadian products, which "complement domestic production and add to the resilience of U.S. supply chains."

Further trade action will harm U.S. domestic manufacturing, "without any counterbalancing benefit to the U.S. domestic wood products industry," Canada said, and that it "agrees with the most protectionist representatives of the U.S. lumber industry that the [current] U.S. trade remedies laws more than suffice to protect the industry. "

U.S. domestic manufacturers who use wood products had mixed feelings toward further trade remedies. Industry group Furniture for America said that "Section 232 tariffs are not warranted for wood products used in furniture production or for furniture," and, if the administration chooses to impose them, asked for an exemption.

The Decorative Hardwoods Association said that its members had been undercut by foreign trade practices and said that these were "ripe for review" by Commerce. The association "strongly supports trade policies to reduce imports of hardwood plywood, hardwood veneer, engineered hardwood flooring and finished hardwood products including cabinets and furniture particularly from Asia."

LP Building Solutions warned that Canadian lumber is "integral to [their] supply chains" and asked Commerce to "consider the vital role that timber and lumber imports play in supporting the U.S. housing market."

The National Association of Homebuilders opposed tariffs for the same reason, saying that it "strongly discourages the imposition of tariffs or other import controls on lumber, timber, or other derivative products, which are critical building materials."

However, the American Woodmark Corporation, one of the largest U.S. cabinet manufacturers, took a more nuanced approach, saying that it is not opposed to Section 232 actions "that target derivative wood products such as wooden cabinets" but that they "must take into account the benefits of an integrated North American production base and supply chain," and urged the administration to "rely on existing USMCA rules of origin."

The American Forest & Paper Association also tepidly favored trade action against Canadian and EU unfair trade practices but said that it was concerned that "the broad application of tariffs or other import restrictions in connection with this investigation could be counterproductive and harmful to U.S. manufacturers of pulp, paper, tissue, and packaging materials." It said that members of its industry depend on imports from specific trees that cannot be readily grown in the U.S.

The National Foreign Trade Council employed similar reasoning and said that climate conditions drive the lumber products in countries, resulting in different wood pulp products, and that U.S. companies "leverage these different fiber characteristics to create finished products that are sold today under iconic American brands and represent billions of dollars in sales and thousands of U.S. jobs, many in rural communities." It also warned that the language of the investigation about "derivative products" was overly broad, which may result "in subjecting products that have minimal nexus to the primary products covered by the investigation and very divergent applications and end uses to tariffs and immensely complicated entry requirements, with little benefit to national security."

The Consumer Brands Association, while "deeply committed to strengthening American manufacturing" and appreciative of "President Trump’s leadership," urged Commerce "to ensure the investigations do not unnecessarily extend to consumer products relied upon by Americans that have no nexus to the domestic wood products industry or to national security" such as toilet paper and paper towels.

The Trump administration, the association said, "has a unique opportunity to apply targeted tariffs or other trade measures in a way that serves overarching national security goals without sacrificing critical American industries and jobs."

Foreign countries universally opposed the possibility of tariffs and rejected that their products injure the U.S. lumber industry. The European Union accused the U.S. of launching a national security investigation "for what appears to be industrial policy reasons," and rejected "the notion that their exports as well as their industries could threaten U.S. national security." The EU also hinted that it may impose retaliatory tariffs, saying that it "will consider its possible options for action."

China opposed the investigation and said that the U.S. "has been abusing the concept of national security, using it as a pretext to launch Section 232 investigations to impose trade protectionist measures."

Peru, Brazil, Indonesia and trade groups from Vietnam all argued that their countries' lumber industries do not harm the U.S. industry and asked for dialogue rather than tariffs.