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China's Tariffs on U.S. Hardwood Exports Deliver ‘Painful’ Blow

China's Tariffs on U.S. Hardwood Exports Deliver ‘Painful’ Blow

(Bloomberg) -- China’s plan to slap tariffs of as much as 25 percent on U.S. shipments of hardwood means a “very, very painful ” blow from the top customer, the American Hardwood Export Council said.

Everything from oak wood to veneered panels of laminated wood has been ensnared in China’s $60 billion escalation of the trade battle with the U.S. Half of U.S. hardwood production is exported, and the bulk goes to China, Michael Snow, executive director of the Sterling, Virginia-based council, said Friday in a telephone interview.

“This could be, I don’t want to say ‘catastrophic,’ but very, very painful for the industry,” Snow said.

Last year, shipments to China included $1.6 billion in hardwood lumber, $800 million for hardwood logs and $260 million for veneer, Snow said. Almost all U.S. hardwood-manufacturing companies are small family owned firms, and the top producers probably account for only about 5 percent of output, leaving the market fragmented, he said.

“It’s going to be a bumpy road, there’s no question about it,” he said.

Some traditional Chinese furniture manufacturers that rely on U.S. products have shut amid new environmental regulations.

“We were looking at some pretty strong headwinds in China” before the latest salvo Friday in the trade battle, Snow said.

To contact the reporter on this story: Jen Skerritt in Winnipeg at jskerritt1@bloomberg.net

To contact the editors responsible for this story: Millie Munshi at mmunshi@bloomberg.net, Patrick McKiernan

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