Duties, wood-furniture exports to the US may drop by 5-8%

According to Etifor, the entire timber market is currently in a state of great uncertainty in both the US and Europe. Among the main factors of instability, in addition to Trump's protectionist policies, are the 'possible response and compensation policies adopted by the countries involved in the face of a return of tariffs; the consequent diversification mechanisms of trade flows, i.e. more timber from Canada to the European Union, Australia that would return to exporting to China together with Russia that, following the European embargo, has already intensified exports to the same; the European Union Deforestation-free Products Regulation (Eudr), a regulation with respect to which few actors in the supply chain have yet fully adapted.

Moreover, the price of crude oil in Europe has risen by an average of up to 25 per cent over the past 18 months, partly due to the stabilisation of environmental conditions after the major problems in the forests due to windthrow and subsequent insect attacks such as bark beetles.

Also according to Etifor's analysis, the role of the 125% tariffs threatened by Trump against China, the world's second largest exporter of furniture to the United States, with $6.6 billion, will be decisive in this interlocutory phase. China accounts for about 24% of the world's imports of raw and processed timber, preceded by Vietnam ($8.3 billion) and followed by Canada ($2.9 billion). The leading European exporter is Italy, which ranks sixth in terms of purchase volume, with $1.3 billion of the total $3.1 billion exported from the EU to the US.

"In fact, even in the presence of tariffs on European exports, a considerable slice of the US market could open up that is no longer garrisoned by China, which could be occupied by other exporters, Italy in primis, which can focus on the quality of raw materials and processing and boost exports of high-end products," explains Mauro Masiero, scientific director of Etifor. The United States is historically the leading destination for Chinese wooden furniture exports, but it must be remembered that in recent years Chinese exports have experienced difficulties in relation to more demanding markets in terms of technical standards and environmental requirements, such as the Japanese and Australian markets, for example'.

Furthermore, if tariffs were to come into force, which could reach 39% for lumber imported from Canada and particularly affect softwoods for construction, "there would be an immediate impact in the United States on the cost of wooden houses, estimated at around $10,000 more per house," the study continues. In Europe, on the other hand, Canada's increased export capacity would contribute to lower prices for raw and semi-finished timber.

This would make it less convenient to use European and national forestry resources, on which a policy of enhancing production capacity is being implemented, such as the creation of the Italian Forest Wood Cluster and the recent Decree of the Ministry of Made in Italy that allocated 25 million euros to finance the supply chain.

"Even in the presence of high tariffs, it should be considered that it would be difficult for the US manufacturing industry to easily and quickly cover the production gap needed to meet domestic demand, despite Trump having stimulated production in federal forests by reducing environmental protection requirements," adds Davide Pettenella, Senior Policy Advisor at Etifor. Similar difficulties could be encountered in the transfer of production to the US by external operators, such as Ikea. The wood-furniture sector, in fact, is strongly based on specific technologies and skills and the cost of US labour is quite high'.

The only solution for the US would be to invest in automation and high technology, but the time is not ripe to embrace such a revolution and related investments.

'Instead, Italy has one strong lever left,' Pettenella concludes, 'the link with the raw material and semi-finished products, such as particle board, on which Italian companies have great competitive ability based on the use of post-consumer wood residues and advanced finishing techniques. An industrial model that the US cannot achieve in the short term'.