A growing number of American sawmills are closing their doors for good. Leaders in the hardwood industry blame years of tense trade negotiations with China for lost sales.
MANCHESTER, Tenn. – Several U.S. sawmills are struggling to stay open after industry leaders said years of trade uncertainty have drained export markets and squeezed margins.
The Hardwood Federation estimates that at least one sawmill goes bankrupt every week. Additionally, the National Hardwood Lumber Association (NHLA) reported that more than 4% of U.S. sawmills have been lost due to closures and consolidations.
The equipment from those sawmills ends up in a growing stack of auction flyers on Johnny Evans’ desk at the Evans Lumber Co. in Manchester, Tenn.
However, Evans is desperate to avoid his sawmill being auctioned due to ongoing trade talks. Evans closed his sawmill the week of Thanksgiving because he couldn’t get enough lumber orders to keep the sawmill open. He used the week to make repairs to his equipment, which he said was great, but it didn’t pay the bills.
“It’s dead quiet here,” Evans said. “We usually run, at least three days a week. It’s not just here. It’s also many of our other customers. They have chosen not to receive wood from us this week.”
Evans said much of this can be traced back to trade tensions that began in 2018, during the first Trump administration. Then some countries, such as China, stopped buying American hardwood lumber in retaliation for President Donald Trump’s tariff policies.
RATES HAVE A SURPRISING EFFECT ON UNEMPLOYMENT AND INFLATION PATTERNS, FED ANALYSIS REVEALS
At the time, the Hardwood Federation reported that American lumber was the second most exported American product to China. When China retaliated, U.S. lumber exporters lost roughly half their market share to competitors in countries such as Russia, Thailand and Malaysia.
Evans said current trade negotiations between the US and China are intensifying pressure that started years ago.
“The Vietnamese told us that if America doesn’t buy their product, they won’t buy our product,” Evans said. “Our sales are down, our lumber prices are down, but our expenses are twice what they used to be.”
The NHLA said other countries’ retaliatory tariffs remain “volatile,” creating a ripple effect that affects global hardwood flows by “reducing margins, shifting manufacturing hubs and changing supply chain dynamics in Asia, Europe and the Americas.”
“During the 2017 trade dispute, the hardwood industry experienced significant challenges, including a 20-25% decline in exports,” said Dallin Brooks, NHLA executive director. “Several businesses had to close their doors and many others struggled to recover. This year is even worse.”
In September, President Trump imposed a 10% tariff on lumber and a 25% tariff on furniture and cabinetry. Two weeks later, more than 450 American sawmills signed a letter from the Hardwood Federation, pleading with the U.S. Department of Agriculture and the White House for help. The letter outlined the hardwood industry’s desire that the Trump administration make this a priority in upcoming trade negotiations with China.
“We were victims of retaliation,” said Dana Lee Cole, executive director of the Hardwood Federation. “If there are enough tariffs on their products here and their markets here shrink, they will fight back.”
Many sawmills face a different challenge as consumers turn to cheaper products that resemble composite or synthetic wood, often marketed as “luxury” alternatives.
“These two things have come together in kind of a perfect storm that has really caused a lot of stress on the industry,” Cole said.
TRUMP’S RECORD TARIFF STORY MEETS HIGH COURT REVIEW AS WHITE HOUSE SUPPORTS RULING
Claire Getty said her family’s sawmill in Huntland, Tenn., struggles to compete with big box stores that promote vinyl or plastic flooring as premium products.
“If you go shopping for a flooring, say, at a big box store, you’ll find more than 200 wood-like options in a luxury vinyl plank, and four to five in a solid hardwood product, Getty said. “I really believe that people today, consumers today, want wood, but it’s not available.”
Getty said the shift to “luxury” wood alternatives has caused major losses flowing from sawmills to tree farmers.
“We are an industry worth saving,” Getty said.
CLICK HERE TO GET FOX BUSINESS ON THE GO
Several sawmill owners are planning an annual trip to Washington, D.C., early next year to directly ask their representatives and the Trump administration for help.
