Maine's forest product industry feeling the effects of Trump's tariffs on Canada
The Maine State Chamber of Commerce has been following the Trump administration's actions on tariffs since the start of the year, said President and Chief Executive Officer Patrick Woodcock.
Initially, the chamber's biggest concern was the potential for few exemptions and retaliatory steps that would drive up costs of everyday products for Mainers.
But while the overall effect so far has been more limited than anticipated, Woodcock said Monday that some individual companies and industries are already seeing a 'dramatic impact.' For example, he said lumber product prices have increased. Similarly, tariffs have driven up the cost of cars, which Woodcock said has been 'hugely consequential' for consumers.
In Maine, 'our forest products industry is the one that is most affected with these specific industry, sector-level tariffs,' Woodcock said. The state imports 2.3 million tons of wood products annually, most of which comes from Canada, according to a recent industry report from the Maine Forest Service.
The Maine Forest Products Council did not respond to a request for comment from Maine Morning Star by the time of publication.
Trump levies a host of new tariffs on U.S. trading partners
Prices for softwood lumber, which can be used in construction or furniture making, were up more than 2% over the past month and nearly 17% higher than they were a year ago, according to a July 25 report from the National Association of Home Builders.
The report attributes recent lumber price volatility to rising tariffs, as well as increased demand, supply chain issues and insufficient domestic production. One way to address the high prices would be a long-term deal with Canada to reduce tariffs and boost imported lumber, the report goes on to say.
However, on Thursday — one day before the deadline President Donald Trump set for reaching trade agreements with dozens of countries — Trump issued an executive order raising the tariff rate on goods imported from Canada to 35%.
Trump said earlier that day it would be hard to reach an agreement with the country because of Canada's announcement that it will recognize a Palestinian state.
The executive order outlining the tariff increase also said Canada, which Trump previously suggested should become the 51st state, failed to do more to address the flow of illegal drugs into the U.S. through the northern border. Maine Attorney General Aaron Frey and other Democratic state attorneys general are currently challenging that argument in the U.S. Court of International Trade, which last week ruled in their favor.
Since the start of Trump's second term, many Maine industries have expressed concerns about a potential trade war with Canada, given how deeply interconnected the state's economy is with its northern neighbor. Every year, Maine exports $1.4 billion in goods to Canada and in turn imports more than $5 billion worth of goods.
In April, Maine farmers and brewers shared their worries about increased costs from the tax on imported goods being passed onto consumers.
Woodcock said Trump's executive orders have narrowed the scope of the tariffs by excluding products that are certified by the existing free trade agreement for North American countries, known as the United States-Mexico-Canada Agreement or USMCA.
The executive order issued last Thursday reiterates that some goods from Canada are still protected by that agreement, which is up for renegotiation next year.
'That limits the number of products that are affected,' Woodcock explained, so the consequences of the tariffs will 'be more company-by-company and will not encompass some of the consumer products commodities that we were very concerned about, including heating oil and electricity.'
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