The impact of tariffs on the timber industry

OVERNIGHT LOWS AGAIN DROPPING BACK INTO THE SINGLE DIGITS. WELCOME TO NEW HAMPSHIRE’S BUSINESS. I’M FRED KOCHER, THE NEW HAMPSHIRE TIMBER INDUSTRY THAT PROVIDES A LUMBER FOR MARKETS IN NEW HAMPSHIRE AND AROUND THE WORLD IS BEING UPENDED BY TARIFFS COMING OUT OF WASHINGTON, CAUSING A WEAKER TIMBER MARKET WITH A REDUCED WORKFORCE. MY GUEST WILL SPEAK TO THIS IN A MINUTE. BUT FIRST, HERE’S A SNAPSHOT OF NEW HAMPSHIRE’S FORESTS AND NEW HAMPSHIRE’S FOREST INDUSTRY. 82% OF NEW HAMPSHIRE IS FOREST LAND, 49% OWNED BY FAMILIES AND INDIVIDUALS, 23% OWNED BY BUSINESSES AND PRIVATE ENTITIES, AND 18% OWNED BY THE FEDERAL GOVERNMENT. NOW HERE’S THE FOREST INDUSTRY 1.6 BILLION PLUS DIRECT ANNUAL ECONOMIC IMPACT. FOREST PRODUCTS IMPACT IS 2.5 BILLION AND A DIRECT AND INDIRECT TOTAL ECONOMIC FOREST OUTPUT THAT INCLUDES THE FOREST BASED RECREATION INDUSTRY, WHICH HAS 7000 PLUS JOBS. TARIFF IMPACTS ON NEW HAMPSHIRE. MAJOR MARKETS SHUT DOWN, SUPPLY CHAINS, DISRUPTED MANUFACTURING CAPABILITIES IMPACTED, AND ADAPTING TO CHANGING TRADE LANDSCAPE. WITH ME TO BRIEF US ON, BRIEF US ON WHAT’S HAPPENING TO ONE OF NEW HAMPSHIRE’S OLDEST AND ECONOMICALLY IMPORTANT INDUSTRIES IS JASON STOCK, EXECUTIVE DIRECTOR OF THE NEW HAMPSHIRE TIMBERLAND OWNERS ASSOCIATION. WELCOME. THANK YOU. WHAT IS REALLY HAPPENING WITH THE IMPACT OF TARIFFS ON NEW HAMPSHIRE’S TIMBER AND LUMBER? WHAT’S REALLY HAPPENING, WHAT’S WHAT’S REALLY HAPPENING IS, IS JUST GENERAL UNCERTAINTY. YOU HAVE SITUATIONS WHERE MILLS ARE PRODUCING LUMBER AND THEY’RE SELLING INTO A MARKETPLACE WHERE THEY’RE NOT SURE WHAT THE TARIFF IS GOING TO BE, NOR THEIR NOR THEIR CUSTOMER. AND IN SOME INSTANCES, WE HAVE SITUATIONS WHERE YOU’LL HAVE TARIFFS OR RETALIATORY TARIFFS THAT BASICALLY JUST SAY MARKET CLOSED. FIND ANOTHER HOME FOR IT. YEAH. SO IT’S CREATED A LOT OF UNCERTAINTY AND A LOT OF A LOT OF MILLS AND WOOD YARDS ARE TRYING TO FIGURE OUT WHERE TO GO WITH THEIR PRODUCT AND HOW TO ADJUST THEIR MARKETING. WELL, ONE OF THE EXAMPLES OF THE IMPACT IN ONE OF NEW HAMPSHIRE’S LARGEST MARKETS IS CHINA. AS YOU KNOW. AND LET’S LOOK AT THAT GRAPHIC. CHINA IMPORTS OF HARDWOOD LUMBER FROM THE US 2018, 30%. AND 2025 DOWN TO 19%. AND THE OTHER MARKET FOR NEW HAMPSHIRE HARDWOODS, AS YOU KNOW, IS CANADA. WHAT HAVE TARIFFS DONE TO THAT BUSINESS? SO CHINA I’LL FIRST I’LL START WITH CHINA. CHINA. THE THE MARKET THERE. AND THAT’S THAT MARKET WAS IMPACTED BY ESSENTIALLY AN IMPORT A BAN ON LOGS COMING IN. THE CHINESE GOVERNMENT SAID NO MORE NO MORE RAW MATERIAL. SO THAT CERTAINLY WAS A VERY ABRUPT CESSATION OF SHIPPING. ANY TYPE OF LOG TO CHINA. BUT ALSO AROUND THAT SAME TIME, WE SAW RETALIATORY TARIFFS FROM CHINA ON LUMBER AS WELL. AND THE DYNAMIC THERE IS IS THAT WE’VE AS A PRODUCT OF THAT, WE’VE SEEN OTHER EMERGING MARKETS IN IN SOUTHEAST ASIA, MOST NOTABLY VIETNAM. VIETNAM HAS STEPPED IN AND SAID, ALL RIGHT, WE’RE GOING TO WE’RE OPEN FOR BUSINESS. WE’LL BUY WE’LL BUY US LOGS. WE’LL BUY US LUMBER. AND AND AGAIN, FOR THOSE BUSINESSES THAT HAVE BEEN SHIPPING AND HAVE RELATIONSHIPS WITH CHINESE MARKETS ARE NOW HAVING TO ADJUST AND SAY, ALL RIGHT, WHO’S WHO’S BUYING IN VIETNAM. WHAT ABOUT OUR NEIGHBOR CANADA? SO IN CANADA, THE DYNAMIC IS EVEN MORE COMPLEX BECAUSE WE HAVE SITUATIONS WHERE YOU CAN HAVE A PARTICULAR LOG, A GO NORTH TO CANADA GETS SAWN AND THEN COME BACK TO THE US. IT MAY COME BACK AS FINISHED LUMBER TO GO INTO A HOME, OR IT MAY COME BACK AS PARTIALLY FINISHED LUMBER MAY STILL BE GREEN AND NOT PLANED. AND SO THE THE QUESTION THERE IS IS HOW? WHERE DOES THE TARIFF IMPACT IT AND IS IT GETTING TAGGED COMING AND GOING. RIGHT. AND HOW DOES THE TIMBER INDUSTRY IN NEW HAMPSHIRE NOW SUSTAIN ITSELF THROUGH THESE TARIFFS. HOW DOES IT DO THAT. IT DOES WHAT WE’VE ALWAYS DONE. AND IT’S JUST IT’S AS AN INDUSTRY IT’S INCREDIBLY CREATIVE. AND THEY FIGURE OUT WAYS TO TRY AND FIND MARKETS AND TRY TO FIND WAYS TO ADD VALUE WHERE AND FIGURE OUT WHO’S WHO’S PURCHASING WHERE. WHERE CAN I BE COMPETITIVE WITH MY HARDWOOD LOG? ONE WORD ANSWER. THERE’S A BILL IN THE LEGISLATURE THAT’S BEEN TABLED THAT WOULD THAT WOULD STUDY THE TARIFF IMPACTS ON NEW HAMPSHIRE. SHOULD THAT BE RESURRECTED? I YES. OKAY. ONE WORD. YES. JASO