News information
Publisher Fordaq | DATE 2019.09.29
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.
Many US hardwood lumber firms have seen reduced demand, and have had to make cutbacks and eliminate jobs. Gutchess Lumber, Baillie Lumber, and Northland Corp. all told the Wall Street Journal that demand has decreased from the same time last year.
Baillie and Northland have been forced to lay off workers. Gutchess reduced overtime and suspended 401(k) contributions.
China helped hardwood exporters during the 2008 financial crisis, writes WSJ, as Chinese customers kept buying oak and ash in large quantities. It remains the top export market, particularly for higher-grade wood like oak and cherry. Now, as the Chinese economy slows, US firms are feeling it.
“Were we relying too much on East Asia and China? Of course we were,” Northland chief executive Orn Gudmundsson said. “But there were no viable alternatives.”
The tariffs are polarizing. Northwest Hardwoods chief Nathan Jeppson and other executives believe they've been disastrous for the U.S. economy. Others acknowledge they're hurting right now, but believe they're necessary long-term. 67 percent of recently-polled Wisconsin manufacturing executives said they support the tariffs even though tariffs are hurting their businesses, WSJ reported.