U.S. Government Moves To Support Wood Industry With New Tariffs

Abstract

On September 29, 2025, the U.S. President issued a proclamation titled "Adjusting Imports of Timber, Lumber and Their Derivative Products into the United States" under Section 232 of the Trade Expansion Act of 1962, introducing new tariffs to safeguard national security and strengthen the domestic wood industry. The measure follows a Department of Commerce investigation concluding that excessive imports of timber and related products were weakening domestic production capacity, supply chain stability, and strategic independence. The proclamation also mandates ongoing monitoring and a comprehensive review by October 2026 to assess potential extensions to other wood derivatives. While the proclamation is expected to stimulate domestic investment, capacity utilization, and job creation, it may concurrently raise input costs for downstream sectors such as construction, furniture, and retail, leading to short-term consumer price pressures.

On 29^th September 2025, the President of the United States issued a proclamation titled, "Adjusting Imports of Timber, Lumber and Their Derivative Products Into The United States". The proclamation is based on an investigation by the U.S. Department of Commerce, that concluded in July 2025 that high levels of imports of timber, lumber and related wood products were undermining America's domestic production, capacity, weakening supply chains, and creating a strategic dependence on foreign sources for materials essential to national infrastructure and defence.

This proclamation is made under Section 232 of the Trade Expansion Act 1962 as amended, 19 U.S.C. 1862, which authorizes the President to impose restrictions or tariffs on imports that threaten to impair national security. The proclamation's central measure is the introduction of new tariffs on several categories of wood and wood-based products.

Starting 14^th October 2025, a 10 percent duty was imposed on imports of softwood timber and lumber, a 25 percent duty on upholstered wooden furniture components and a 25 percent duty on kitchen cabinets, vanities, and their parts, which will increase to 50 percent at the beginning of 2026. The proclamation also clarifies that these duties supersede any overlapping tariffs established under earlier executive orders relation wood and wood products.

Further, the proclamation also provides a differentiated tariff structure in view of the existing trade partnerships. Imports from the United Kingdon will not face tariffs exceeding 10 percent, while imports from the European Union and Japan will be capped at a combined total of 15 percent.

Beyond imposing tariffs, the proclamation sets out a framework for monitoring and future adjustments. The Secretary of Commerce is required to continuously assess import levels and market conditions and to recommend additional measures if the threat persists or evolves. By 01^st October 2026, the Secretary of Commerce must submit a detailed report evaluating the effects of these tariffs and determining whether similar measures should be extended to hardwood timber and other wood derivatives not initially covered.

The economic and strategic rationale behind the proclamation is twofold. On one hand, it aims to revitalize domestic production, encouraging investment in modernized mills, higher capacity utilization, and job growth in regions dependent on forestry and wood manufacturing. On the other hand, it seeks to reduce dependency on imports that the administration views as destabilizing to U.S. supply chains. However, while the proclamation is expected to benefit domestic producers, it may also generate higher costs for downstream industries such as construction, homebuilding, furniture manufacturing, and retail, where imported wood and components are integral inputs. These cost pressures could, in turn, influence consumer prices for homes and furnishings, at least in the short term.

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