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Forestry Sector Expresses Uncertainty After First Month of New U.S. Tariff

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At the end of September this year, U.S. President Donald Trump announced a special 10% tariff on forestry imports, which has now taken effect.

Just over a month after the measure was implemented, the Government and sector associations in the Region conducted a preliminary assessment of the situation, in addition to projecting the scenario for the end of the year regarding forestry exports.

Alejandro Casagrande, regional president of Corma Biobío and Ñuble, expressed concern about the decline in sector exports, "which fell by approximately 23% year-on-year in October, marking four consecutive months of decreases."

According to the union leader, the main cause of this decline "is linked to the drop in the international price of pulp, especially in China, our main market. This is compounded by reduced dynamism in shipments of boards, veneers, sawn, planed wood, and moldings, whose returns have decreased due to both lower prices and reduced international demand."

In his analysis, Alejandro Casagrande added that, in this scenario, "the uncertainty associated with the tariffs imposed by the United States also plays a role, which has hindered commercial stability in a key market. This situation further strains the competitiveness of a sector already impacted by internal factors such as fires, timber theft, and higher operating costs in Chile."

Meanwhile, Michel Esquerré, regional and national president of Pymemad, the union representing small and medium-sized enterprises in the forestry and timber sector, considered that exports could be falling sharply in terms of sawn wood, "given the uncertainty being generated in the market, not only in Chile but internationally."

From the Government

Meanwhile, Javier Sepúlveda, Regional Ministerial Secretary of Economy, Development, and Tourism of Biobío, stated that the statistical data provided by the National Statistics Institute regarding regional exports are only available up to August 2025. Therefore, "it is not yet feasible to conduct a definitive evaluation of the impact generated by the imposition of the additional tariff by the U.S. Government on forestry exports originating from the Biobío Region. The cumulative balance during the period from January to August 2025 reflects a 16.4% contraction in the value of forestry exports from the Biobío Region, compared to the same period the previous year."

The Regional Ministerial Secretary of Economy, Development, and Tourism of Biobío further detailed that the mentioned decrease is attributable to the decline in exports of key sector products such as Pulp (-17.4%), Sawn Wood (-15.3%), and Wood Fiber Boards (-20.3%), in which "despite the overall trend, it is important to highlight the increase in export levels of certain products, suggesting an adaptive capacity in the business sector, such as Plywood (+4.4%) and Papers and Cardboards (+3.7%). This behavior indicates that the productive sector has internalized the new conditions of the international economic context, focusing on seeking commercial alliances and diversifying destinations for their forestry products."

Sepúlveda also deemed it relevant to note that the imposition of tariffs on these products constitutes a unilateral decision by the U.S. Government, "adopted without prior bilateral negotiation with our government."

"Nevertheless, the Ministry of Foreign Affairs, through the Undersecretariat of International Economic Relations, has maintained an active work agenda since the beginning of this year," he added.

Previous Academic Analysis

"According to the statement from President Donald Trump's administration, the current import scenario has underutilized the productive capacity of the U.S. forestry industry, which also plays a key role in the activities of the military apparatus dependent on the Department of Defense, now the Department of War," contributed Andrés Acuña, Director of the Master's in Applied Economics (MagEA-UBB) of the Department of Economics and Finance at the Faculty of Business Sciences of the University of Bío-Bío (UBB), who first analyzed the importance of the forestry sector in the Regional Gross Domestic Product in the context of reviewing potential future effects of the new tariffs on the regional economy.

In more detail, Acuña indicated that according to information available from the National Statistics Institute and the Central Bank, at that time, "forestry exports from the Biobío region exceeded 3.6 billion dollars (MMUS$) in 2024, a figure equivalent to 18.2% of the Gross Domestic Product (GDP) of our region in nominal terms. In turn, in the January-July period of 2025, forestry exports from Biobío exceeded MMUS$ 1,700. Of the previous figure, over 20% was destined for the United States in 2024, while 37.3% of shipments went to China in the same year. As of July 2025, the share of forestry shipments to the United States and China reached 23% and 31.2%, respectively."

In line with the above, Andrés Acuña highlighted that forestry sector exports to the United States "have significantly lost their relative importance since 2023 to date, a year in which they represented 37.5% of forestry shipments. This may be a sign that the U.S. construction sector is not prioritizing Chilean products as high-demand inputs, or that the international positioning strategy of the local forestry sector has favored trade relations with the Asia Pacific, considering that South Korea was the third most important destination in 2024."

Regarding what a 10% tariff implies for the regional economy, the professor from the Faculty of Business Sciences at UBB provided a relevant data point for analysis, explaining that, according to the statement issued by the White House on September 29, there are significant national security reasons to limit the import of wood, sawn wood, and their derivatives, as per the report prepared by the Department of Commerce on July 1 of this year.

As for potential projections, according to the Director of the Master's in Applied Economics (MagEA-UBB), almost all forestry exports from Biobío will be affected by the new tariff measure. "However, I would be cautious in forecasting a completely negative scenario for the regional and national forestry sector, as the Federal Reserve (Fed) has indicated a bias towards lowering interest rates for the remainder of the year."

"Regardless of the above, what is key, in my view, in this scenario of tariff uncertainty, is the willingness of our country's economic and commercial authorities to proactively engage in negotiations with the administration of President Donald Trump, in order to strengthen trade relations with one of our main partners and return tariff values to those established in the current Free Trade Agreement between both nations," he concluded.

Source:Diario Concepción