March 05, 2025

US Trade War Benefits New Zealand

China has suspended imports of lumber from the United States, in retaliation for the imposing of additional tariffs on their exports to the US.

This benefits New Zealand as China is NZ's biggest trading partner. 60% of all wood exported to China comes from four producers; namely, Russia, United States, New Zealand and Canada. From this category of products NZ exports mostly logs (timber), and then sawn timber (lumber) to a lesser extent. I notice media are reporting China's suspension of imports, but then talk of logs, so they may be incorrectly describing, or if it is US logs affected (and not just sawn timber per se), that profits NZ greatly. 

For those interested in the process, the logs are trimmed and cut to length, then stockpiled according to grade. Machines that process the logs are often the Waratah brand, machines made in New Zealand and exported worldwide. This is what a Waratah looks like, it is the processor fitted on the end of an excavator dipper arm: https://www.youtube.com/watch?v=xX1d6c-clrM and https://www.youtube.com/watch?v=FwZJqI9xxWE

With Donald Trump proving he's insane, some stand to gain. The below video mentions how many of the lumber mills in the US are actually owned by Canadian interests, so profits resulting from Trump's move will ultimately find their way back to Canada. File this under the law of unintended consequences. Increases in prices within the US, benefit Canadian companies owning US-based operations.

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