Latest on Chinese Wood Tariffs

The Hardwood Federation reports that, “[T]he Chinese government [has] announced they would proceed with retaliatory tariffs on U.S. products in response to the Trump Administration’s imposition of 10% tariffs on $200 billion worth of Chinese imports, including a variety of hardwood and hardwood products. Retaliatory tariffs were be imposed on $60 billion worth of U.S. exports at either a 5 percent or a 10 percent rate, and began the same day – Monday, September 24, 2018 at 12:01 a.m. HF received a list translated from Chinese of the logs and lumber we intend will be those affected that has since been confirmed by US hardwood people on the ground in China.

China’s latest list of retaliatory tariffs does not appear to be changed from the proposed list released in early August. You may view the list of agricultural products included in both lists  here. Forest product numbers begin with 44 and start on page 11. Initial review indicates that tariffs will be applied as follows: A 10 percent rate would apply to products originally slated for tariffs of 20% and 25%. A 5 percent rate would apply to products originally slated for tariffs 10% tariff and 5 %

Poplar, Walnut lumber 5%

Hard maple lumber 5%

Oak logs and lumber 10%

Cherry lumber 10%

White Ash lumber 10%

Ash, Poplar, Walnut logs 10%

Hickory, Cherry, Basswood, Maple logs 10%

The Chinese government’s announcement did not clearly indicate if the Chinese tariffs will increase on January 1, 2019 to match U.S. planned rate increase from 10% to 25%. However, separate statements indicate that “if the United States insists on further increasing its tariff rate, the Chinese side will respond accordingly, with related matters released separately,” perhaps hinting that China will increase rates on these products back to the levels proposed in the August 3 draft if the U.S. moves forward with increases.

Trade negotiations that were initially proposed to take place late in September were cancelled by the Chinese in light of the imposition of the latest round of tariffs. Unfortunately, no future talks have been mentioned. We will continue to monitor the situation and push for negotiations to begin.