OR Timber Feeling Squeeze from Trade War, COVID-19
Monday, November 30, 2020
PORTLAND, Ore. -- The timber industry in Oregon and across the country is battered from an unresolved trade war with China and the COVID-19 pandemic.
Andrew Muhammad, professor of agricultural and resource economics at the University of Tennessee, formerly worked for the U.S. Department of Agriculture's Economic Resource Service on international trade issues.
He said the U.S. provides raw timber materials to China and then buys back the finished products.
But tariffs caused Oregon exports to China to drop 70% between 2017 and 2019. With an additional decrease in demand due to COVID-19, Muhammad reported the state's connection to China is suffering.
"A state that once exported, say, $100 million in logs and lumber and other forest products to China looks like it's on record to being less than $10 million this year," Muhammad observed.
Imports of wood furniture and other products to the U.S. from China were down 40% as of August. Muhammad added an already vulnerable industry has taken a massive hit this year.
He also noted the losses have a ripple effect on communities.
"You have all these associated and related activities such as the income from laborers and how they spend that moving forward, trucking activities, other related value-added activities that take place," Muhammad explained. "That too gets diminished by this decreased exporting."
Muhammad clarified some parts of the timber industry are doing OK during the pandemic, such as the home lumber market, because more people are staying in their houses.
But he cautioned it would be preferable to have a wholly viable industry, especially for communities in states such as Oregon.
"Even if other aspects of the sector seems to be sort of thriving, if not just surviving throughout this COVID-19 pandemic period, certainly the decline in exports has been felt by particular producers, and it would be good if that could get resolved," Muhammad concluded.
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