Trump sets 10% tariff on lumber imports, 25% on cabinets and furniture

WASHINGTON: US President Donald Trump said on Monday (Sep 29) he was slapping 10 per cent tariffs on imported timber and lumber and 25 per cent duties on imported kitchen cabinets, bathroom vanities and upholstered furniture, continuing his tariff assault on global trading partners.

Trump signed a presidential proclamation laying out his argument that timber, lumber and furniture imports are eroding US national security to justify the new duties under Section 232 of the Trade Act of 1974.

The proclamation said the tariff rates would start on Oct 14, but added that duties will increase on Jan 1 to 30 per cent for upholstered wooden products and to 50 per cent for kitchen cabinets and vanities imported from countries that fail to reach an agreement with the United States.

The action is the first in three sectors that Trump said last week would get steep new duties as early as Oct 1, including patented pharmaceutical imports and heavy truck imports. But Monday's proclamation sets the start of the lumber and furniture duties two weeks later, at 12.01am local time on Oct 14.

Trump's proclamation said wood product imports are weakening the US economy, resulting in the persistent threats of closures of wood mills and disruptions of wood product supply chains and diminishing utilisation of the US domestic wood industry.

"Because of the state of the United States wood industry, the United States may be unable to meet demands for wood products that are crucial to the national defence and critical infrastructure," the statement said.

The order added that wood products are used for "building infrastructure for operational testing, housing and storage for personnel and materiel, transporting munitions, as an ingredient in munitions, and as a component in missile-defence systems and thermal-protection systems for nuclear-reentry vehicles."

PAIN FOR CANADA, VIETNAM, MEXICO

The action heaps more tariffs on Canada, the biggest softwood lumber supplier to the US, where producers already face combined US anti-dumping and anti-subsidy tariffs of about 35 per cent due to a long-festering dispute over timber harvested from Canadian public lands.

Canada, which hopes to negotiate US tariff reductions through a broader revamp of the 2020 US-Mexico-Canada agreement on trade, has said it would provide up to C$1.2 billion (US$870 million) in aid to its softwood lumber producers to cope with the prior duties.

Mexico and Vietnam are growing suppliers of wooden furniture to the US after Trump hit Chinese furniture products with tariffs of up to 25 per cent during his first term starting in 2018 - duties which have since been raised to about 55 per cent and now could nearly double for cabinets and vanities.

Trump's proclamation offered some countries that have struck tariff-reducing trade deals with the US some relief from the higher wood products duties. It said that US tariffs on wood products from Britain would be capped at 10 per cent and those from the European Union and Japan would be capped at 15 per cent - rates in line with the base tariff rate in those framework agreements.

But Trump's statement made no mention of his trade deal with Vietnam for a 20 per cent tariff rate in July, an agreement that still has not been formally documented.

In April, after the Commerce Department opened the national security probe into US lumber imports, the US Chamber of Commerce announced its opposition to any restrictions on imports of timber, lumber and their derivative products, including wood pulp, paper and cardboard.

"Imports of these goods do not represent a national security risk," the Chamber wrote. "Imposing tariffs on these goods would raise costs for US businesses and home construction, undermine the export success enjoyed by the US paper industry, and reduce incomes in many US communities."