Tariffs on wood products exported to the United Sates remain at ‘0’ percent as the section 232 Investigation aimed at determining the global effects imports of timber, lumber and their derivative products pose to the U.S. supply chain continues.

Although the ‘0’ percent tariff rate is a welcome relief for wood product exporters, the uncertainty of what may eventuate from the section 232 Investigation is causing nervousness across New Zealand wood processers and manufacturers who export over NZD$370 million of value-added wood product to the United States.

Developments over the weekend included President Trump announcing on a Truth Social post that a major new tariff investigation on furniture (incl. wooden furniture) coming into the United States will be completed within 50 days at a tariff rate to be determined. This was followed by release of the draft EU and U.S. Trade Agreement Framework which promptly ensures that the tariff rate applied to section 232 actions on lumber does not exceed 15 percent. 

‘These announcements create further uncertainty, with a survey of our main U.S. exporters of wood products to the U.S. highlighting that a tariff rate of 5 percent or over will have a significant hit on their profitability in the longer-term.’ Wood Processors and Manufacturers Association (WPMA) Chief Executive, Mark Ross, said. ‘The U.S. is a growing market for our value-added wood products and with a drop off in NZ domestic demand, profitable export markets are critical to growing our industry.’

Having our Trade Minister, Todd McClay, speaking up in support of the NZ wood processing industry on the section 232 Investigation in his recent Washington negotiations with U.S. Trade Representatives, is highly valued by WPMA members and we thank the Minister and his negotiation team for backing our exporters.

‘The key is to present a united face across industry and government to the U.S. decision makers as to the value of our wood products to the U.S. and that our products are not a threat to their domestic timber manufacturing or supply chain,’ said Ross.

With the outcome of this section 232 investigation expected no later than early December, WPMA will continue to engage with our allied U.S. Associations, who are lobbying the U.S. Administration to keep imported timber and lumber products tariff free as a means of levelling recent domestic U.S.  house price rises and maintaining robust supply chains. 

New Zealand is known in the U.S. for providing high value and high-quality wood products, most of which is sold into the DIY end user’s market, such as Home Depot, Lowes and Menards. As a small niche supplier of wood products that are needed by the U.S. domestic building market, such as long clear Radiata pine boards, mouldings and primed product, there is a strong argument for keeping New Zealand timber and lumber imports tariff free. 

With comments from exporters such as customers in the U.S. are already pressurising us to reduce product price, it will be a tough ask to pass any additional tariff costs on should they prevail.

‘While the section 232 Investigation continues WPMA will do what we can to advocate to keep New Zealand imported timber, lumber and their derivatives into the United Sates tariff free’, said Ross, ‘But, at the end of the day the U.S. President will be the final tariff rate decision maker, and we know from experience we need to be ready to expect the unexpected.’

WPMA’s survey of timber and lumber exporters to the U.S, key findings included:
• Due to the small profitability margins, anything over a 5 percent tariff would cause 50 percent of exporters to rethink as to the value of exporting to the U.S.
• If a tariff was introduced, most exporters would both pass tariff costs onto their customer and absorb the cost, while a small percentage would look at diverting product to other markets.
• Half indicated that higher tariffs on other competitive countries, should they eventuate, may provide an advantage to their business. 

Media Contact: Mark Ross,  Chief Executive, Wood Processors and Manufacturers Association of NZ 027 442 9965 mark@wpma.org.nz