The Hardwood Federation Newsletter

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Hardwood Federation February 2020 Newsletter

From the Executive Director:  Latest Trade News, Both Good and Sobering

On Friday February 21st, China announced it would lift retaliatory tariffs on U.S. hardwoods starting Friday February 28th, 2020 for an initial period of one year ending on February 27th, 2021.  We are working closely with our colleagues at the American Hardwood Export Council both in the U.S. and China to monitor details as they emerge.  It has been confirmed that all hardwood species, lumber and logs, are on the tariff reduction list. 

It is interesting to note that only 55 product codes are included in the tariff elimination list which consists primarily of items related to fighting the Coronavirus:  medicines, medical supplies, medical equipment etc.  Hardwood products do not really fit in with the rest of the items listed, indicating that the Chinese government felt pressure, from the U.S. government, Chinese companies or both to address hardwoods.

I was attending the Appalachian Hardwood Manufacturers Inc. meeting in Florida when the news of the reduction hit.  Meeting attendees were extremely appreciative of the efforts the Hardwood Federation, the Boards of Directors and industry leaders have made to raise awareness of the impacts of the trade war on the industry both here in the U.S. and in China. 

However, although it appears we have a temporary reprieve, it is important to remember that we still have challenges to face in the coming months.   Positive as this news is, markets will not be immediately restored to 2017 or 2018 levels.  China’s struggling economy and the ongoing escalation of the Coronavirus are adding new and challenging barriers to recovery.  AHEC is reporting that since the beginning of the trade war with China the industry has declined by $1 billion, a devastating impact by anyone’s measure.  My sense is that we must build on the positive developments as well as continue our efforts to seek financial relief and other measures to ensure that long term stability is restored to the markets. 

We will continue to work with Mike Snow and his AHEC team (who have all been tremendous partners), to understand the latest developments and share insights with our member associations and supporters.

2020 Corporate Funding Drive:  The trade war with China has been devastating to many hardwood businesses and families.  These are exactly the times when the Hardwood Federation and the Hardwood Federation PAC can be used most powerfully by the industry and we need to make sure they are funded to maintain our presence.  It is imperative that we continue to leverage our collective industry dollars to the maximum effectiveness. 

It took an incredible effort by the Hardwood Federation and the industry to not only be included, but mentioned by name in announcements and media hits, in the Phase One China Trade deal.  It took even more consistent pressure to have the counter tariffs removed on hardwood logs and lumber.  This is the power of the Hardwood Federation. This is the power of the PAC.  But we cannot just sit back and admire our work – we need to keep up the pressure, keep educating, keep being the squeaky wheel. 

Please consider contributing to help us in our work on behalf of the industry in Washington D.C.  Visit our website at www.hardwoodfederation.com or contact us at (202) 463-2705 for more information.

We need your help to continue our efforts.  Please keep the Hardwood Federation in mind as you consider 2020 industry contributions.


Issues

Appropriations Process and CTE – Proposed Increases for Career Technical Education a Good Sign

The Fiscal Year 2021 appropriations process officially kicked off earlier this month with the Administration’s submission to Congress of its FY 2021 budget request.  Although typically these annual budget requests are more of a messaging document for the Administration (regardless of party in power) and serve to highlight those areas that are priorities and those that are not, there was some good news in this year’s budget request from the Trump Administration.   Under the Administration’s FY 2021 budget request, career and technical education (CTE) would receive nearly $900 million in additional funding.  This figure represents a $680 million increase, or over 50 percent, for Perkins Basic State Grants and over an $80 million increase (more than 100 percent) for Perkins National Programs.    Another $100 million in additional funds for Perkins could be derived from changes to the H-1B visa program. 

In another positive development earlier this month (February happens to be Career and Technical Education Month), Senators Tim Kaine (D-VA) and Todd Young (R—IN)—co chairs of the Senate CTE Caucus—introduced S. 3273, the Assisting Community Colleges in Educating Skilled Students (ACCESS) to Careers Act.    The bill would set up a community college and career training grant program with the goal of increasing college and career readiness.  Specifically, S. 3273 would provide resources to states and community colleges in order to address the evolving demands of the labor market. The bill aims to boost student success and career readiness by increasing work-based learning opportunities, ensuring students have access to support services such as career navigators and counselors, and creating career pathways to meet the changing skill demands of the U.S. economy. 

As we are well aware that qualified labor is an issue for a lot of our members, the Hardwood Federation has been monitoring funding for Perkins and a number of legislative proposals similar to S. 3273 pending in the House and Senate to promote CTE.

Climate Policy/Markets for Wood - Trillion Trees Act from Rep. Westerman Announced

Earlier this month, Representative Bruce Westerman (R-AR-4) introduced the Trillion Trees Act, legislation that attempts to deliver on House Republican leadership’s goals around climate change policy.   As we know, Westerman is a forester by training and the lead champion of the wood and forest products industry in the U.S. Congress.   The bill has a number of key components, including:

  • A “sense of Congress” to support the United Nation’s Trillion Trees Initiative and calls upon the federal government, corporations and U.S. citizens to take an active role in reforestation efforts.
  • Directs the Department of Agriculture to establish targets for total increased wood growth on domestic forests for the purpose of capturing and sequestering carbon.
  • Adds carbon sequestration as a goal for several existing state and private forest management programs.
  • Establishes a sustainable building tax credit for both the commercial and residential market designed to promote building materials that store carbon—namely wood. 
  • Creates a competitive grant program to increase research into advanced wood bioproducts, including biofuels, biochemicals and bioplastics. 

Unfortunately, the chances of this measure moving beyond the House Committee of jurisdiction are very small, but it does contain a number of interesting concepts that could see life in another, smaller scale proposal or stand-alone bill.  We look forward to working with Congressman Westerman and his peers on both sides of the aisle to seek alternative paths to implementation.

Kitchen Cabinet Rulings – Positive Developments for the Domestic Cabinet Industry

The U.S. Department of Commerce has made a final ruling with the decision to move forward with anti-dumping and countervailing duties on imports of Chinese made kitchen cabinets and vanities.  The imposed anti-dumping duties will range from 4.3% to 262.2%, while countervailing duties will range from 13.3% to 293.5%.  in 2018 the U.S. imported almost $4.5 billion in Chinese cabinets and vanities.  This is a big win for the domestic kitchen cabinet and vanity industry. The ITC is set to make their final ruling on April 6th.


Happening in the Hardwood World

Dana on the Road!

It’s already been a busy year for travel.  I was very happy to participate in the Indiana Hardwood Lumbermen’s Meeting and the Appalachian Hardwood Manufacture’s Inc. meetings over the last month.  Thank you to Ray, Tom and their fantastic teams for giving the Hardwood Federation time to speak and the opportunity to network with your fantastic members!

Happy 125th to PLM!

The Hardwood Federation would like to say Happy 125th Birthday to Pennsylvania Lumbermens Mutual Insurance Co.  They celebrated this milestone on February 25th (which also happened to be Mardi Gras and we are sure both were celebrated accordingly!).  Here is to 125 more!


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