Lumber Mills Suffering Under U.S.-China Trade War
New York, NY, September 27, 2019-As a fallout of the U.S.-China trade war, U.S. lumber mills are struggling and laying off workers, reports the Wall Street Journal in an article called, “‘It’s a Crisis’; Lumber Mills Slash Jobs as Trade War Cuts Deep” by Austen Hufford.
“The big bet that U.S. hardwood lumber companies placed on China over the past two decades is collapsing.
“China was a savior of sorts for the industry after the financial crisis last decade. Customers there kept buying oak and ash boards in large quantities, while construction and furniture production fell in the U.S.
“Now, after Beijing placed retaliatory tariffs of up to 25% on imports of lumber and other U.S. wood products, exports of hardwood lumber to China have fallen 40% this year.
“The lower demand pushed U.S. hardwood lumber prices down 20% in August from a year earlier and prompted companies to seek government assistance. A slowing Chinese economy also has reduced demand.
“‘It’s a crisis the likes of which we just never had to deal with before,’ said Matthew Gutchess, president of Gutchess Lumber Co. in Cortland, N.Y. ‘The demand elsewhere is just not absorbing what China is dropping.’
“Gutchess’s revenue has fallen 25% this year. In response, the company reduced overtime and suspended contributions to employee 401(k) retirement plans.
“Baillie Lumber Co. of Hamburg, N.Y., another large producer, has eliminated several dozen jobs. Lumber processor Northland Corp. of La Grange, Ky., has cut its workforce of 75 people in half.”
Baillie is the parent company of Mullican.