Sep 26, 2019

Trump trade war rebounds hard on America's lumber workers

Photo: Rnesto Benavides/AFP/Getty Images

Lumber mills in the U.S. have been a casualty of President Trump's trade war with China, as a significant dip in demand has pushed hardwood lumber prices down, the Wall Street Journal reports.

Why it matters: Chinese buyers were critical for lumber after the 2008 financial crisis, as American construction and furniture production dropped. Now, Beijing's retaliatory tariffs on as much as 25% of lumber and wood imports are draining the U.S. industry.

By the numbers: The percentage of American hardwood exports to China dropped from a peak 54.19% in 2017 to 49.5% in 2018, according to the Department of Agriculture.

  • By this year, that number dropped to 41.34%.
  • As of August, lumber prices fell 20% from the previous year.
  • Other countries are reaping the benefits of the American market's downfall. Russia and Gabon now make up 17% of imports by value, up from 12% through July of 2018.

The Trump administration and Congress have met with industry leaders who are pushing for comparable assistance to what American farmers have received since the trade war began.

  • But the Department of Commerce indicated it has no procedure for distributing such aid, according to the WSJ.
  • “There is no question that these tariffs have virtually destroyed a segment of our industry,” said Steven Anthony, president of Anthony Timberlands.

What's next: The Journal said some companies are pushing U.S. buyers to purchase more hardwood products to make up for the losses.

  • Jim Hourdequin, CEO of Lyme Timber Co., presented an idea: A marketing push similar to the "Got Milk?" ads that the dairy industry famously produced in the 1990s.

Go deeper: The market wants a U.S.-China trade deal

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China trade war could give foreign farmers long-term edge over U.S.

Soybeans imported from Brazil are unloaded at China's Nantong Port. Photo: Xu Congjun/Visual China Group via Getty Images

Although a partial agreement was announced last week, the U.S.–China trade war has already brought about changes in global supply chains that could have lasting effects on the American economy, particularly in the agricultural sector.

The big picture: The prolonged U.S.–China tariffs are exacerbating the harms to American farmers wrought by both other trade conflicts and the U.S. withdrawal from the Trans-Pacific Partnership. Foreign food producers are now likely to benefit at the expense of their U.S. counterparts, who have struggled to shift former Chinese exports to other markets.

Go deeperArrowOct 18, 2019

U.S. trade deficit grows to $54.9 billion in August

The U.S. trade deficit grew to $54.9 billion in August, jumping for the first time in 3 months due to increased imports, reports the AP from Commerce Department data.

Why it matters: Though it had fallen in June and July, the country's overall trade deficit is still up for the year as a result of President Trump's ongoing trade war with China.

Go deeperArrowOct 4, 2019

Agriculture secretary says small dairy farms may struggle to survive

Agriculture Secretary Sonny Perdue. Photo: Alex Wong/Getty Images

Agriculture Secretary Sonny Perdue said Tuesday at the World Dairy Expo in Madison, Wis., that there are no guarantees that smaller family dairy farms in the U.S. will survive due to changing business models and economic struggles, per the AP.

"In America, the big get bigger and the small go out. I don't think in America we, for any small business, we have a guaranteed income or guaranteed profitability."
Go deeperArrowOct 2, 2019