China’s Ministry of Finance announced this morning that it would increase tariffs on 5,140 U.S. goods starting on June 1 in retaliation to U.S. increases on Chinese products last week. Many if not all the impacted products were identified for 25 per cent tariffs in late December, but were frozen at five to 10 per cent in light of positive negotiations between the two countries. Few details are available, but the notice did indicate that:
- 2,493 items will be tariffed at 25 per cent;
- 1,078 items will be subject to 20 per cent tariffs;
- 974 items will be subject to 10 per cent tariffs; and
- 595 items will continued to be levied at five per cent.
The Wall Street Journal is reporting that tariffs will impact goods leaving the U.S. after June 1. At this point Hardwood Federation is hearing that various species of hardwoods will be impacted by the increases, but final translated lists are not yet available. It seems likely that U.S. wood imports to China will be tariffed at the rates announced prior to the freeze:
- Oak species at 25 per cent;
- Cherry and ash at 20 per cent; and
- Walnut, hard maple, tulipwood and alder at five per cent.
However, Hardwood Federation cannot confirm these tariff levels at this time. Further information will be communicated as soon as they can confirm what species will be impacted at what level. They are also hearing that China may put into place an exclusion process allowing Chinese importers of U.S. products impacted by this latest round of increases to petition for relief of the tariffs on certain goods. Again, there is not yet confirmation of this move. Hardwood Federation will release more information in due course.
The Hardwood Federation is also reaching out to their contacts at the U.S. Department of Agriculture to assess the potential of economic relief for those in the hardwood industry impacted by the U.S. China dispute. They will share any insight they receive.