Trade. Trade. And More Trade.
Trade. It seems to be on everyone's mind these days and has become the almost singular focus for the Hardwood Federation day to day. The Hardwood Federation has had an incredibly busy month of May staying on top of the twists and turns and tweets and turmoil of the U.S. trade war with China. The global market place impacts us all more than we probably realized and the last several months have made us all more informed and aware than we probably ever thought we would be. There is no need to rehash each and every twist and turn of U.S. trade policy over the last year or so, but we do want to review what is has happened in the last few weeks and where we are going from this point.
After months of extensive trade talks between high level players in both the US and China everything appeared to be moving towards some sort of resolution. The US felt that enough ground had been gained regarding the longstanding Chinese postures on IP theft, forced technology transfers, as well as a number of other trade and market related positions. Both sides apparently felt they were holding the other over a barrel and getting exactly what they wanted. However, when the Chinese side appeared to walk back many of these concessions and refuse to put them in writing with enforceable conflict resolution mechanisms - it is also said the Chinese were reluctant to make any agreement that would require China's legislature to approve changes to current law - everything blew up and on Friday May 10th the Trump Administration increased what were tariffs lowered on good faith to 25% on all listed Chinese goods. This includes the 5% and 10% tariffs on US hardwood logs and lumber moving to 25%.
This is the gist of where we stand. To fight back The Hardwood Federation has been proactive and taken a much stronger stand than we previously had. With direction from the HF Board a position statement was prepared that relayed the devastating impact the US-China Trade War is having on our industry. Indeed, some operations and sectors of the industry have benefitted from the proceedings, but in general domestic mills have suffered sharp sales declines of export sales, lost jobs and in some cases shuttered operations. The long-term health of the industry relies on these mills and their production capacities. The impacts the industry and our markets are suffering are devastating to the communities reliant on good paying hardwood jobs up and down the supply chain, and when they are lost, they will be lost forever.
The HF and HFPAC Boards sent a letter (which can be viewed here ) to US Department of Agriculture Secretary Sonny Perdue outlining this stance supported by the robust US economic numbers from our recent hardwood Economic Impact Study. This letter also asked that hardwood producers be included in any and all agriculture industry relief measures. In addition, an HF Action Alert to members of the hardwood industry urging their Members of Congress to reach out to USDA regarding these relief measures garnered far and away the best response we have ever had. In total the tremendous response saw 360 individual hardwood members send a total of 1,083 messages to a total of 183 Congressional offices. This is an amazing response in a short time and really shows how large a voice the industry can wield. Unfortunately, and far out of any of our control, hardwoods were not included in the announced $16B relief package as only the growing community (and cotton) rather than producers received any consideration at all. HF followed up with messages to USDA relaying our disappointment and concerns with these decisions.
In hopes of still building attention to the difficult predicament the industry is facing HF and our member associations sent out a press release ( you may view it here ) to the Business Wire, which was quickly picked up by Yahoo News, among other outlets. And in other media news a joint effort between AHEC and HF led to a CNN interview featuring HF Board Member and President of Baillie Lumber Jeff Meyer, which you can view here.
In addition, HF staff sent out a "recess memo" asking the hardwood community to engage with Members of Congress back home in their states and districts during the end of May Congressional Recess and we are actively setting up two Hardwood Trade Days on June 11th and 12th to get the hardwood industry in front of targeted, influential, Senators who may be able to relay our messages to the Administration.
We anticipate June will be another extremely busy month and that this issue is far from settled. Please don't hesitate to reach out if we can be of assistance and thank you for all of the support as we ask you to reach out to Congress. These messages may seem like a trickle as you hit the send button, but hundreds and thousands of them together create a powerful statement from the people that Members of Congress care most about, their constituents. Please continue to share your thoughts, concerns and ideas with YOUR elected officials through our outreach tool available here.