Hardwood Federation August 2018 Newsletter
From the Executive Director: Trade Continues to Heat Up DC's Usual Slow August Pace
There is a prevailing myth that August in DC is hot and slow. The hot part is true, the slow part seems to be a relic of the past. At least for the Hardwood Federation. Trade and the impacts of the dispute with China have been the focus of attention since the early days of summer, but heightened concerns within the industry and the almost daily developments have really kept us on our toes over the last six weeks. Making sure our Farm Bill preferences are understood has also been a primary activity. And of course we are in the midst of preparing for our upcoming Board Meeting and the annual Fly-In on September 11-13. We anticipate we will break attendance records this year spurred on by trade worries. It should be a busy few days.
Earlier this month we published a list of ways YOU can participate in the trade debate. We are republishing that list at the end of the issues section of the newsletter. Even though Members of Congress are expected to be back in D.C. next week, the November elections will drive many of them to be in their home states and districts as much as possible over the next few months. Take any opportunity to engage them in person if you have thoughts to share...and if not in person, use the links below to send them in writing. Remember your voice matters...don't hesitate to use it!
Issues
USDA Forestry and Wildfire Announcement
On Thursday August 16th at an event on the Senate side of the Capitol Building Agriculture Secretary Sonny Perdue, along with Senate Energy and Natural Resources Chair Lisa Murkowski (R-AK), Ranking Member Maria Cantwell (D-WA), and Members Sens. Daines (R-MT) and Ron Wyden (D-OR) and Interim US Forest Service Chief Vicki Christiansen, unveiled a new federal plan for addressing wildfires. Earlier this year, Perdue and Cantwell worked together on a commitment to use unmanned aircraft technology this fire season, and the Washington Democrat will likely highlight similar tools and technology today.
The plan emphasizes increased collaboration with states, implementation of mapping and remote sensing tools, and management practices such as prescribed burns and timber sales. Though Perdue brushed aside specific questions on climate change's role, he said Interior Secretary Ryan Zinke is on board with the plan and noted further details and costs will be forthcoming from the U.S. Forest Service. "Really a lot of people ... when you talk about climate change, they want to talk about what the causes are," Perdue said. "[What] we're trying to talk about is the impact."
HF was extended a personal invitation to the event and Policy and PAC Manager Cary Moon attended on our behalf.
(l to r) USFS Interim Chief Vicki Christiansen, Sec. of Agriculture Sonny Perdue, Sen. Steve Daines (MT), Sen. Lisa Murkowski (AK), Sen. Maria Cantwell (WA), and Sen. Ron Wyden (OR) at the announcement in the Capitol Building.
Forest Management
As mentioned in the previous section Interior Secretary Ryan Zinke is using the latest California wildfires as an opportunity to promote more effective forest management. At an event in California on August 6th with Agriculture Secretary Sonny Perdue, Sec. Zinke amplified the need for prescribed burns, mechanical thinning and targeted cuts of trees, as well as pushing a recently announced collaborative effort between the two departments with regards to active forest management.
Sec. Zinke's push could also be helped by some provisions in the House farm bill that would encourage commercial logging and streamline environmental review of certain projects in national forests. However, the Senate version of the bill doesn't contain those provisions, but it's possible they could it into the conference committee's final version of the legislation.
Farm Bill
In the very waning moments of July 31st the Senate moved to conference the farm bill via voice vote after a lot of discussion and last-minute issues. Nine Senators were appointed by Senate Agriculture Chairman Pat Roberts (R-KS) to meet with the 47 House members we reported on in the July Newsletter. These Senators are:
Republicans
Chairman Roberts (KS)
Mitch McConnell (KY)
John Boozman (AR)
John Hoeven (ND)
Jodi Ernst (IA)
Democrats
Agriculture Committee Ranking Member Debbie Stabenow (MI)
Patrick Leahy (VT)
Sherrod Brown (OH)
Heidi Heitkamp (ND)
Although work has been undertaken behind the scenes, the first full conference meeting will take place on Sept. 5th and it is known that the reconciliation of the two takes on the Supplemental Nutrition Assistance Program (SNAP) appears to be the most difficult task facing the negotiations, as well as conservation programs, crop insurance programs, and subsidies. The time frame for a signed bill is also rapidly depleting, especially if House leaders decide to recess their session earlier than planned in September.
New Tax Rules
On August 8th the Department of the Treasury and the Internal Revenue Service issued proposed tax regulations for a new 20% tax deduction for owners and businesses organized as pass-through entities made law as part of the Tax Cuts and Jobs Act of 2017. Treasury Secretary Steven Mnuchin was quoted on the proposed rules, saying, "The pass-through deduction is an important tax cut for small- and mid-size businesses, reducing their effective tax rates to their lowest levels since the 1930s. This 20-percent deduction will lead to more investment in US companies and higher wages for hardworking Americans."
Here is a statement on the proposed regulations from House Ways and Means Chairman Kevin Brady: https://waysandmeans.house.gov/brady-statement-on-treasury-regulation-regarding-pass-through-businesses/
USDA Nominations
On August 28th, the Senate voted to confirm Jim Hubbard as the next Under Secretary for Natural Resources and the Environment at USDA. As many of you know, Under Secretary Hubbard worked for the Colorado Forest Service for over three decades, serving as the Colorado State Forester for the final twenty years in his stint there. In his new role at USDA, he will be overseeing the day to day operations of the U.S. Forest Service. Mr. Hubbard is a well-known commodity to those of us who work on federal forest policy. He is a strong supporter of expediting needed forest management projects as a tool to keep forests healthy and resistant to wildfire, insects and disease. The Hardwood Federation team looks forward to working with him in this next exciting step in his long career.
Trade and Tariffs
Trade with China is not the only trade negotiation of note this week. On Monday, August 27, President Trump announced the conclusion of U.S.-Mexican trade talks to create a U.S-Mexican Trade Agreement which could potentially serve as a partial replacement for the currently existing North American Free Trade Agreement (NAFTA) between the U.S., Mexico and Canada. The U.S. Congress must be officially notified no later than Friday, August 31 if the agreement has any chance to move forward before the new Mexican government takes office. The U.S. Trade Representative has released fact sheets on manufacturing, agriculture and modernization. The White House released this general fact sheet on the updated agreement as well.
Final language has not yet been released for review, but announcements have indicated that cross border trade of agricultural products will continue to be duty free. The summary of the Environment Chapter in the fact sheet states that the U.S. and Mexico agreed "to enhance the effectiveness of customs inspections of shipments containing wild fauna and flora" and to "support sustainable forest management". Such language reflects an enhancement of the current NAFTA agreement.
Canada immediately returned to the negotiating table in an effort to bring all three countries back into a tri-lateral agreement. Although these are all very positive steps forward, a number of complicated steps must be taken before final resolution is achieved.
U.S. Treasury officials also met with Chinese officials this week to discuss the ongoing trade dispute between the two countries. No real progress was made. As we note above, below are ways that you and your company can weigh in regarding the how the potential Chinese tariffs on U.S. hardwood will impact your company.
Taking Action on Tariffs
The Hardwood Federation is reaching out to the Administration, Congressional Leaders, and the trade community in Washington D.C. to share the hardwood industry's experience. But it is vital that business owners, employers and employees also make their voices heard. Below is a list of how you can take action.Hardwood Federation Action
What You Can DoAdministration Outreach
The Hardwood Federation has met with several Trump Administration officials in the U.S. Department of Commerce and USTR to express our concerns. We are also working on scheduling meetings with high level officials for the Hardwood Federation Fly-In on September 12.Add Your Voice
Contact Administration Officials at the following e-mail addresses:
Contact the White House:
https://www.whitehouse.gov/contact/
Contact USTR:
correspondence@ustr.eop.gov
Contact Commerce:
webmaster@doc.gov
Submitting Comments to the Administration
The Hardwood Federation board is considering the submission of proposed comments from the Hardwood Federation to the Administration regarding the proposed List 3. Comments are due on September 5. Provide Your Comments Directly
Companies can provide their comments directly to Commerce for the public record at the below website.
https://www.federalregister.gov/documents/2018/07/17/2018-15090/request-for-comments-concerning-proposed-modification-of-action-pursuant-to-section-301-chinas-acts
Congressional Outreach
The Hardwood Federation staff is meeting with select leadership and committee offices to discuss our concerns about trade policy impacts on the industry. This includes Senate Majority Leader McConnell's Office, House Ways and Means Committee majority staff, Senate Finance Committee staff and Speaker Ryan's office. We have also met directly with Members of both the House and Senate during fund raising events over the past few months.Add Your Voice
It is vital that Members of Congress hear directly from their constituents.
Contact House and Senate Members via email:
https://www.votervoice.net/THF/Surveys/4697/Respond
Members of the House and Senate will be in the home states during much of August...take the opportunity to meet with them in-State of attend a Town Hall Meeting. Find contact information for state offices here:
https://whoismyrepresentative.com/
Collecting Examples of Impacts
The Hardwood Federation has solicited comments from Hardwood companies regarding the impacts of the trade dispute with China on their industry. These comments are extremely helpful as we describe what the industry is experiencing to those in the Administration and Congress.
Share Your Story
Tell us how the trade dispute is impacting your company at the below link:
https://www.votervoice.net/THF/campaigns/60209/respondUniting With Others
The Hardwood Federation has been actively involved with a coalition of trade associations impacted by the trade dispute. We have signed on to multi-industry letters expressing concerns about the potential impacts of the wide ranging approach.
Engage with State and Local Business Organization
Make sure your state and local industry and business groups are aware of how your company is being impacted and become involved. Many local and state industry associations are planning meetings with Members of Congress...make sure you attend them and voice your concerns!!
Hardwood Trade Statistics
Keep in mind, the most important thing you can share with your elected officials and the Administration is how this trade dispute is directly impacting your business and your ability to employ workers. Below are some additional facts about the importance of the hardwood industry to the U.S. economy to supplement your message.
- The wood products industry in the U.S. is an important contributor to the U.S. economy, accounting for approximately 4 percent of the total U.S. manufacturing GDP;
- Wood products companies are among the top ten manufacturing sector employers in 47 states, producing $210 billion in products annually;
- The industry employs nearly 900,000 people; more than the automotive, chemicals and plastics industries.And most of them are in rural areas where employment opportunities are limited.
- Hardwood is an important sub-sector of the wood products industry and has a heavy reliance on export markets for its survival;
- In 2017, U.S. hardwood producers shipped $4.04 billion worth of U.S. products to global markets; $2.09 billion to Greater China, including Hong Kong and Macau;
- Combined, China, the NAFTA countries and the E.U. make up 82% of hardwood exports. As should be clear, dependable, long-term export markets are vital to the sustainability of the hardwood industry.
- In 2017, the U.S. had a trade surplus of $1.475 billion in hardwood lumber, up from $1.1 billion in 2015.
- It is vital that markets remain open for these businesses and the men and women they employ
Contribute to HFPAC!!!
During the February Board Meetings the HFPAC Board set an aggressive goal to keep our industry well positioned in the present political climate and the very important elections coming up. This is going to be a wild ride to the elections on Nov. 6 when 1/3 of the Senate and every House seat will be up for grabs. With all of the recent retirement announcements and the roller coaster to come this year it is more important than ever that HFPAC remains strong, viable, and supporting the hard work of the Hardwood Federation and the hardwood industry. We Need Your Support so Consider Contributing Today!!!
As a reminder there is a difference between Hardwood Federation and Hardwood Federation PAC fundraising. Any individual and any company may give as much as they want at any time to the Hardwood Federation. These funds are used for operations, salaries, day to day expenses, and anything else that is not PAC related. They are also 82% tax deductible.
On the other hand, contributions to HFPAC must be from individuals only, up to $5,000 per year, and can only be used for PAC related expenses. HFPAC, while managed by HF, belongs to the industry. It is designed to strengthen elected officials' understanding of the hardwood industry and advocate on the industry's behalf in Washington. The PAC is bi-partisan, working with those of both political parties and sends a powerful message to our elected officials telling them we are a serious and engaged industry.
If you participated in HFPAC in 2017 we continue to extend our deepest thanks and hope you will continue giving again this year and even jump up your participation level if you are able. If you missed out on giving last year, now is the best time to get involved.
For more information, please visit the HFPAC website and fill out a Prior Approval Form so that we may contact you directly on our efforts. Or, to get involved in the Hardwood Federation PAC please contact Cary Moon (202-463-5186 or cary.moon@hardwoodfederation.com) for more information.
Happening in the Hardwood World
Golden Archway to the Future of Wood
Welcome to the Future...and the future is wood. McDonald's has unveiled their new flagship store in Chicago and it is a gorgeous design dominated by Cross-Laminated Timber (CLT). Read more about it below:
https://www.woodworkingnetwork.com/mcdonalds-new-flagship-store-made-cross-laminated-timber