Longshoremen are loading the bulk carrier Tunsin at the Port of Astoria’s Pier 1 with at least 5.5 million board feet of timber from Astoria Forest Products leaving Friday for China.
The Tunsin, the last ship scheduled for this year, could be the last log export indefinitely for the Port until the deepening trade war between the U.S. and China is resolved.
Chad Niedermeyer, the yard manager for Astoria Forest Products, said log ship contracts for next year have been put on hold because of impending tariffs.
President Trump recently announced 10 percent tariffs on $200 billion worth of Chinese goods, with an increase to 25 percent next year.
The Chinese currently charge 5 percent tariffs on Douglas fir and hemlock, along with 10 percent on white woods such as spruce and grand fir, Niedermeyer said. But if Trump’s tariff increases take effect, Chinese customers are indicating there will be 25 percent tariffs on all U.S. imports, he added.
The slowdown in log exports, the Port’s largest single source of revenue, has caused the agency to consider budget cutbacks and look for alternate sources of revenue.
Astoria Forest Products recently began a partnership barging logs from Pier 1 to Southport Lumber Co., a mill near Coos Bay. Southport has a contract with the state of Oregon for about 3 million board feet of timber over the next year, and with private buyers will likely acquire a total of 5 to 8 million board feet, Niedermeyer said.
While the agreement slightly buoys Astoria Forest Products, it pales in comparison to the Chinese export business, which regularly sends out more than 5 million board feet of timber on each ship. Meanwhile, the price of logs has gone down from about $600 to $400 per 1,000 board feet since August because of both the tariff issue and unrelated decreases in the log market, Niedermeyer said.
Jim Knight, executive director of the Port, told the Port Commission Tuesday that the region will play host later this year to potential log buyers from South Korea.
“We’re hoping this turns into an opportunity for the Port,” he said. “We have a specific species that have interested them. This might mean a half dozen log ships we didn’t anticipate.”
The Koreans are interested, but their log market is only 20 percent of China’s, and there will be more competition for their business with Chinese exports slowing down, Niedermeyer said. The company has already cut its workforce in response to the slowdown.
“What it’s really going to come down to is whether the 25 percent tariffs come into effect,” Niedermeyer said of returning to normal. “We’re anticipating the tariffs will be reconciled between the first of the year and the second quarter.”