The on-going trade dispute between the US and China may lead to an increase in tariffs on US hardwood imports into China (which currently accounts of over 50% of all US hardwood exports) from the current 10% to 25% from March onwards.
The trade dispute combined with signs of slowing economic growth in China, has contributed to a sharp decline in the value of the Chinese renminbi against the US dollar. This coupled with a desire by traders to ensure shipments do not arrive in China either over the New Year holiday period or after the new higher tariffs become due on 1st March, led to a sharp fall in US hardwood exports to China in the last quarter of 2018.
Against this background, US hardwood importers are once again turning their attention to the opportunities presented by the European market. The full impact has yet to be felt, since heavy rain reduced US hardwood production last year and thereby helped underpin prices even as Chinese demand waned.