Tariffs and the Wood Industry

Trump Tariff Tools and Their Impact on the U.S. Hardwood Industry

By: Dana Lee Cole, Executive Director, Hardwood Federation

Tariffs have become a central feature of U.S. trade policy under President Trump in 2025, going well beyond the strategies of the first Trump Administration. While tariffs are often discussed as a single policy lever, they are actually imposed under several distinct legal authorities, each with different purposes, processes, and potential consequences for businesses. For the U.S. hardwood industry—an export-dependent manufacturing and a unique member of the agricultural sector—understanding these tools is critical to navigating today’s trade environment.

There are three primary tariff authorities being used by the Administration:

International Emergency Economic Powers Act (IEEPA): IEEPA grants the President broad authority to regulate commerce after declaring a national emergency tied to an unusual or extraordinary foreign threat. Historically, IEEPA has been used primarily to impose economic sanctions rather than broad-based tariffs. In 2025, however, the Trump Administration has expanded its use of IEEPA to justify global “reciprocal” tariffs, citing persistent trade deficits and other economic pressures as national emergencies.

Under this approach, tariffs have been imposed rapidly and without prior congressional approval and applied across a wide range of countries and products, often with limited notice. Goods affected include agricultural products, industrial inputs, and consumer goods, making IEEPA one of the most disruptive tariff tools for globally integrated supply chains

Section 232: National Security Tariffs: Section 232 of the Trade Expansion Act authorizes tariffs when imports are determined to threaten U.S. national security. The Department of Commerce investigates and submits recommendations to the President, who then decides whether to impose tariffs and at what level. This authority was used extensively during President Trump’s first term and has again been expanded in 2025. While Section 232 is most commonly associated with steel and aluminum, its scope has broadened significantly. In September 2025, the Administration issued a proclamation imposing tariffs on various wood-related products, including softwood lumber, kitchen cabinets, vanities, and certain upholstered wooden products, with some tariff rates scheduled to increase further in 2026. These actions demonstrate how national security justifications can extend well beyond traditional defense-related materials

Section 301: Unfair Trade Practice Tariffs: Section 301 of the Trade Act is used to respond to unfair trade practices by foreign governments, such as intellectual property theft, forced technology transfer, or discriminatory market access barriers. Under this authority, the U.S. Trade Representative investigates and may recommend tariffs intended to pressure the offending country to change its behavior.  Section 301 tariffs are most commonly applied to China and are often product-specific rather than global. While narrower in scope than IEEPA or Section 232 tariffs, Section 301 actions can still significantly disrupt trade flows, especially when they trigger retaliation against U.S. exports

Taken together, the expanded use of IEEPA, Section 232, and Section 301 tariffs has created a challenging and unpredictable operating environment for the hardwood industry, and indeed most U.S. business sectors.

On the cost side, tariffs raise prices for imported equipment, machinery, and components essential to hardwood operations, including kiln systems, blades, conveyors, forklifts, and packaging materials. Higher costs for steel and aluminum further increase the expense of facility upgrades, expansions, and modernization efforts, reducing competitiveness for domestic manufacturers.

On the market side, tariffs invite retaliation from key trading partners, placing U.S. hardwood exports at risk. Even the threat of retaliatory tariffs can disrupt long-standing customer relationships, slow orders, and encourage overseas buyers to shift sourcing to competitor countries. This was the case when China imposed retaliatory tariffs on U.S. hardwood during the first Trump Administration and the impacts of that action still linger today.  For an industry that relies heavily on export markets to balance domestic supply, this uncertainty can quickly translate into lost sales and reduced mill utilization.

From a business planning perspective, companies face constant uncertainty. Different tariff rates may apply to the same product depending on its country of origin, and those rates can and do change with little notice. Importers and exporters must continually update duty projections, reassess sourcing strategies, and manage contract risk, often mid-stream.

Finally, there are broader downstream effects. Higher costs and reduced demand can ripple through logging operations, secondary manufacturers, transportation providers, and rural communities that depend on a healthy hardwood economy.

Since the close of the 2024 elections, the Hardwood Federation has prioritized educating the Administration, Congress and federal agencies about the impacts of various  trade and tariff policies on the U.S. hardwood industry.  The Federation brought on some additional muscle through a contract with  Monument Advocacy to expand outreach and led a 450-company industry letter urging inclusion of hardwoods in trade assistance programs. The letter generated significant media coverage, focusing on the impacts felt by small and medium hardwood companies across multiple states. We are now turning our focusing on advocating for inclusion in yet to be determined relief programs for agriculture industries not already receiving support.  This effort will be the top priority as we roll into 2026.  The Federation continues to educate policymakers, engage the press, and advocate for export-supportive trade policies and will be looking to our member associations to help spread the work and energize their members to speak out to elected officials and decision makers. With help from a united industry, our chances of success seem better than ever.