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The economic landscape of North America is experiencing one of the most intense periods of trade tension in its history. President Trump’s announcement of new tariffs to the tune of 10% on all imports from China and 25% on imports from Mexico and Canada has sent ripples through global trade, and the effects will hit several sectors hard. Sources: Timberbiz, ResourceWise. Among the products listed, Canadian lumber plays a pivotal role. Its implications are profound for the US lumber market. President Donald Trump declared an economic emergency to enforce a tariff policy, introducing a 25% duty on imports from Canada, one of the United States’ most significant trading partners. These tariffs target key goods such as energy oil, natural gas, and electricity as well as timber and lumber products exported from Canada to the US. On August 13, 2024, the US Department of Commerce released the final results of its Fifth Annual Administrative Review concerning the antidumping (AD) and countervailing (CVD) duty orders on Canadian lumber exports. The review set a new combined duty rate of 14.54% for most Canadian lumber exports, almost doubling the previous rate of 8.05%. This new rate applies retroactively to lumber exports made in 2022, as well as to new shipments. For the Canadian softwood lumber sector, which is already the largest foreign supplier of softwood lumber to the US, these developments present a significant challenge. Many industry professionals believe that the 25% tariff introduced under the economic emergency will be imposed in addition to the newly adjusted duty rate. If this proves to be the case, Canadian lumber exports could face a combined effective tariff of 39.5%. The impact of these measures stretches deeply across the operations of lumber producers and forest products professionals, affecting businesses on both sides of the border. Although the announcement of a one-month delay on these tariffs was made, understanding the potential impacts remains crucial. There are substantial implications for both Canada (supply side) and the US (demand side). While both sides of the border are grappling with low operating rates and difficult economics, the US is likely to fare better in the long run. Here is why. ResourceWise estimates that approximately 1.3 billion board feet of lumber capacity in British Columbia is now at risk due to these tariffs. The added costs make it increasingly difficult for Canadian producers to export lumber to the US profitably. Canada is a Spruce-Pine-Fir market. Historically, when US demand was not satisfied from Canada, Pacific Northwest (PNW) lumber producers stepped in first to fill the gap, followed by imports from Scandinavia. Currently, European lumber imports represent about 6% of US lumber demand. With higher tariffs in place, we expect both PNW producers and European exporters will be positioned to benefit from this. However, as domestic production in the PNW ramps up to offset reduced Canadian imports, log supply in the region will tighten. This imbalance will lead to higher log costs, increasing pressure on sawmill profits. Southern Yellow Pine (SYP), while not a direct substitute for SPF in framing applications, may see a slight uptick in demand, which the South would benefit from. Yet, we do not expect log prices to increase due to an overabundance of pine sawtimber. To compensate for the reduced Canadian supply, these three scenarios could likely play out in some proportion. Increased Production in the Pacific Northwest (PNW): The operating rates in the PNW are historically low. We expect operating rates to increase from the low 70% range to nearly 80%, resulting in a 5% to 10% boost in lumber production from existing sawmills. This would increase total annual production by 0.6 billion board feet to 1.3 billion board feet. However, we expect some upward price pressure on logs prices to accompany the new demand. Scaling Up Production in the South: Southern sawmills may also step up production to help bridge the gap. If PNW production lands on the lower end of its projected range (5%), it would only cover half of the 1.3 billion board feet shortfall. The remaining deficit would likely require a 3% increase in Southern production. As mentioned earlier, there is no strain on the sawlog supply, so sawtimber prices would stay stable. European Imports: A third option involves boosting lumber imports from Europe. Again, if PNW production lands on the lower end of its projected range (5%) – to fill the deficit, European exporters would need to increase their shipments to the U.S. by 22%, raising their market share from 6% to 7%. While we expect import volumes to increase, lumber prices would have to increase sustainably for incremental volume to arrive profitably. What Comes Next for Forest Products Professionals? The full impact of these tariffs on lumber markets will not be immediate, but the long-term effects could reshape industry dynamics. Reduced Canadian imports could mean shuttered mills and a permanent loss of capacity. The supply would then shift to US producers or European importers. For global buyers, diversification of sourcing strategies will become increasingly important. European and other international suppliers may see opportunities to fulfill growing demand in the US market. However, geopolitical and economic factors mean this diversification strategy also carries risks. The US-Canada trade tensions highlight the fragile interconnectedness of global markets. For forest products professionals and lumber producers, these tariffs are both a challenge and an opportunity.

Uncertainty still hangs over the Canadian economy despite US President Donald Trump announcing a 30-day pause in tariffs that were to take effect today. Global News www.globalnews.ca The temporary reprieve halts — at least for now — a continental trade war that economists on both sides of the border warned would raise prices. Trump’s decision meant Canada and the provinces also halted their moves to retaliate including with tariffs and bans on US alcohol sales north of the border. Trump signed an order to impose 25% across-the-board tariffs on Mexican and Canadian imports, with a lower 10% tariff on Canadian energy. On Monday, following two phone calls with Prime Minister Justin Trudeau, Trump said the tariffs would be off the table for 30 days to see if the two countries could reach a “final economic deal.” In his own social media post, Trudeau outlined his government’s Can$1.3 billion plan to address Trump’s stated concerns about border security that Canada unveiled in December. He also said nearly 10,000 front-line personnel “are and will” be protecting Canada’s border and announced Can$200 million in new initiatives to address fentanyl trafficking including a “fentanyl czar.” Canadian Public Safety Minister David McGuinty and Terry Duguid, minister responsible for Prairies Economic Development Canada, will join Manitoba Premier Wab Kinew later this morning at the Emerson port of entry, where they’ll see how the Canada Border Services Agency detects fentanyl and other toxic materials. They’ll also see a Black Hawk helicopter which the RCMP is now using to patrol the Uborder in the province. But the tariffs delay is not a long-term comfort for many in Canada’s labour and business communities. Unifor, the country’s largest private sector union, insists that Trump’s threat of tariffs remains in effect, threatening Canadian jobs. National President Lana Payne calls for Canada to “use every single available lever to build a strong, resilient, and diverse economy.” But the tariffs delay is not a long-term comfort for many in Canada’s labour and business communities. Unifor, the country’s largest private sector union, insists that Trump’s threat of tariffs remains in effect, threatening Canadian jobs. National President Lana Payne calls for Canada to “use every single available lever to build a strong, resilient, and diverse economy.” The Business Council of Canada also notes that “with a 30-day delay, much uncertainty remains.” President and CEO Goldy Hyder said it remains clear that Canada must “act with urgency to improve our long-term economic prospects.” Quebec Premier François Legault complained that “what’s annoying” about dealing with Trump “is that there’s always this sword hanging over our heads.” He believes the events of the last few days emphasize the importance of diversifying markets and limiting Canadian dependence on American exports. Canada has spent the last three months on a full-court press in Washington, DC and Mar-a-Lago, Trump’s Florida resort, trying to push its case against tariffs. Despite the pause, that work continues.

A US company that specialises in the defence, national security and global markets has successfully executed a multi-week demonstration of its self-driving truck platooning system technology with a Canadian research and technology organization that assesses, adapts and delivers solutions to Canada’s forest industry’s total value chain. Source: Timberbiz Kratos Defense & Security Solutions’ Unmanned Systems Division worked with FPInnovations on the project. The Kratos developed self-driving system “kit”, which enables vehicles to be capable of autonomous driving, was deployed for evaluation in forestry operations in northern Québec, Canada. Deployment of this technology is intended to mitigate driver shortages, improve safety protocols, boost rural economic vitality, and contribute to the development of a regulatory framework for autonomous vehicles. The automated platooning technology performed exceptionally well in the challenging forestry environment and hauled both unloaded and loaded timber trailers. The Kratos system demonstrated precision navigation in automated platooning mode along complex off-pavement roadways with degraded access to GPS, steep grades, severe visibility-limiting dust, sub-freezing temperatures, rain, and under variable day/night/twilight lighting conditions. The Kratos platoon deployment featured two class-8 tractor-trailers, with one human-driven Leader truck collecting navigation data along the way and transmitting the data to one self-driving Follower truck. Both trucks were retrofitted with Kratos automated driving systems, enabling the Follower to follow the Leader’s navigation data with only a Safety Rider onboard for this initial testing/demonstration. The human driver in the Leader truck plays a critical role optimizing performance of the driverless follower by adjusting vehicle speeds, gaps, and maneuvers to adapt to rapidly changing environmental or operational conditions. This human-in-the-loop decision-maker provides added safety and deployment flexibility by enhancing navigation performance of the driverless vehicle versus relying solely on complex and often unpredictable AI and Machine Learning algorithms, as employed by other systems. The combination of a human-driven Leader and a driverless Follower, powered by advanced sensors, navigation, Vehicle-to-Vehicle (V2V) communication, and automated systems, has proven to be an effective driverless truck deployment model across multiple industries. “The successful deployment of our self-driving truck platooning technology in the Canadian forestry industry demonstrates the ability of the system to navigate complex situations in challenging environments,” Maynard Factor, Vice President of Business Development for the Kratos Unmanned Systems Division, said. “This is a game-changing effective and viable solution for maintaining critical business continuity even under the current driver shortage situation. “By pairing a human-driven leader truck with a driverless follower, we’ve developed a flexible deployment model that prioritizes both safety and productivity. “The human driver of the Leader can adjust driving behavior in real-time as needed to optimize performance of the self-driving Follower to navigate complex edge- and corner-case situations safely,” he said. “We are driving innovation for our clients by leveraging a unique deployment model using field-proven technology to offer real solutions for ensured supply chain reliability.” Regulatory agencies, trucking contractors, and industry stakeholders were welcomed to evaluate the technology and ride along in Leader and Follower vehicles to see first-hand how the system performed on the forest roads within the operational environment. Feedback was very positive, with many highlighting the system’s performance and potential to support forestry and other industries across Canada. Discussions regarding follow-on deployment opportunities are already underway, reflecting strong interest and confidence in the capability of the Kratos platooning technology.  

Arbre is holding an open day where you can experience demonstrations of a new tracked harvester simulator and learn about Abre’s new pre-employment program. Source: Timberbiz The event will be held on 13 March at RDO Equipment in Rocherlea, Tasmania. At the event there will also be information about Arbre’s new Forestry Operator Pre-Employment Program run in conjunction with Timber Training Creswick (RTOID 4168). This is an entry level 5-day training program and will provide three Certificate II units of learning, which are: Follow workplace health and safety policies and procedures in forest and wood products operations Follow environmental protection procedures in forest and wood products operations Operate a forest machine simulator in a virtual environment. The first program will be run from 24 – 28 March 2025, and registrations are now open. There is no need to RSVP. For more information contact Denise DeBattista hub@arbre.net.au or call 0419 130 557. The event is at RDO Equipment 4 Australis Drive, Rocherlea, Tasmania.  

New Zealand’s Minister of Forestry Todd McClay has welcomed a decision by forestry sector representatives to drop Judicial Review proceedings related to the Emissions Trading Scheme (ETS) fees. Source: Timberbiz “The Judicial Review was initiated in response to the excessive fees imposed on the forestry sector by the previous Government,” Mr McClay says. “The previous Labour government made a number of decisions that drove up the cost of ETS Registry and they expected the forestry sector to blindly pay for their mistakes. “The National-led coalition Government has worked hard to rebuild confidence in the forestry sector over the past 12 months. “We have been working collaboratively with the sector to ensure we get the settings right to restore trust to the over 4,300 forestry participants in the ETS registry. “Last year we announced that the cost of participating in the ETS registry would be reduced by 50 per cent for forest owners, and the formation of a Forestry Sector Reference Group to find more cost savings over the next year. “This Government backs forestry, it will continue to play a key role in achieving our ambitious target of doubling exports by value in 10 years and helping New Zealand meet its climate change obligations,” Mr McClay says.

The largest union representing 270 white and blue-collar workers at the Kimberly-Clark Australia Millicent Mill has endorsed the restructure of the company. Source: The SE Voice www.sevoice.com.au The workforce was informed by management on Thursday the American owners were creating a new company called Kimberly-Clark IFP ANZ Pty Ltd. It would run its Australian operations including the Millicent Mill for the Kimberly-Clark Corporation of the USA. Lawyers from the Construction, Forestry, Manufacturing, Mining and Energy Union have examined the new arrangements and raised no objections. The SE Voice has seen the memo to Millicent Mill employees which states there will be no changes to their status, service record, location, job title, salary, leave entitlements, severance pay and other aspects of their enterprise bargaining agreements. In effect, they would have to resign from KCA and join the new entity which comes into effect on 1 April 2025. If employees are unwilling to commit by 28 February, the company memo states a notice of termination from the Millicent Mill might be issued. In these cases, severance and termination payments would not be made. The CFMMEU informed its 270 Millicent Mill members yesterday of its opinion of the restructure. “(We are) confirming that our legal team have no issues regarding the Kimberly-Clark corporate restructure and your completion of the documents,” wrote Denise Campbell-Burns in a memo obtained by The SE Voice. Ms Campbell-Burns is the CFMMEU Manufacturing division president and the Pulp and Paper Workers District secretary and is expected to take a key role in negotiating a new enterprise bargaining agreement which is due on July The SE Voice sent a number of detailed questions to the KCA headquarters in Sydney and received a statement from a spokesperson. “There are no changes to the running of the Millicent Mill,” the spokesperson said. “In 2024, K-C launched its Global Powering Care strategy to simplify our structure and enable us to act with speed and agility through a new, focused segment structure. “As is often the case with structural changes of this kind, system changes are required to enable the two segments – International Personal Care and International Family Care & Professional – to operate efficiently and sharpen focus on their respective categories. “As part of this process, we have introduced a new legal entity called Kimberly-Clark IFP ANZ Pty. Ltd.” The Federal Government’s Australian Business Register states Kimberly-Clark IFP ANZ Pty Ltd was registered as an Australian private company on 4 September last year. The Kimberly-Clark Corporation released its annual worldwide results a week ago and noted production levels had increased at the Millicent Mill over the 2024 calendar year.

Contractors called on to reduce the bushfire risk in Victorian forests are contemplating selling expensive heavy machinery presently sitting idle due to no work. Source: The Weekly Times www.weeklytimesnow.com.au The Victorian government has confirmed a reduction in work for the Department of Energy, Environment and Climate Action panel of contractors was a “temporary variation” and promised work would return later in the financial year. But the lack of work has already led to two Gippsland contractors shedding staff with the fate of their machinery including bulldozers used to maintain forest fire access roads and other specialist works, the next consideration. “We’re sitting here twiddling our thumbs wanting work,” said one contractor who would only comment to The Weekly Times on the basis of anonymity. “We’ve put off all our employees. “It doesn’t leave us with many options other than to start selling machines. “What it has done is create a lot of uncertainty. “If there is a big fire, who do I go and employ?” East Gippsland MP Tim Bull raised the lack of work with Environment Minister Steve Dimopoulos and recently received a response confirming the “temporary variation”. The type and volume of work fluctuates based on various factors, including funding allocated for government priorities or initiatives; seasonal conditions and risks; and statutory planning and approval processes, Mr Dimopoulos said. It coincides with employment of harvest and haulage contractors doing similar work following the demise of the native timber industry. Another contractor said, “the pie hasn’t got any bigger, in fact it’s only got smaller”. “Good luck to the logging guys because they should never have been kicked out of the bush in the first place,” he said. “But what we were doing previously was a significant part of our income. “We’ve also had to let staff go. “The consequence of all this is when the proverbial hits the fan, they’re not going to have the experienced operators or knowledge around. “We’ve got machines grazing and not doing much at the moment. “We just hope we can ride things out.” Mr Bull said it was a disgrace the Victorian government had starved work from family-run businesses, after being promised similar volumes as previous years. “These contractors are small business operators who have to maintain very expensive equipment and be on standby for when they are called to help out in the event of a bushfire,” he said. “Having the tap turned off on all work without notice hits them hard. “The region simply can’t sustain any further loss of this skilled workforce. “Especially in the wake of the native timber industry shutdown.”