Local businesses respond to recent wood-product tariffs

NORTHEAST WIS. – The lumber and wood-product tariffs set to take effect Oct. 14 aim to bring fairness to the U.S. market for business owners like David Fischer of Component Solutions in Menominee, Mich., while others in the local lumber industry say they’ve lost Canadian customers because of trade wars.

Fischer’s company sells lumber and parts for companies making cabinets and windows. His customers sell to Home Depot, Menards and Lowe’s, he said, explaining his role in the supply chain. About 80% of his customers are located within the border states of Wisconsin and Michigan, though he sells throughout the world.

For all the talk about expansion possibilities overseas, an unlevel playing field has disadvantaged U.S. companies like Component Solutions, Fischer said. To him, the tariffs are welcome news.

“It’s going to be a very positive thing because a lot of places overseas send their cabinet parts and their cabinets to the U.S. to undercut our markets over here. So, I think it’s a very positive development. It’s going to be very good for the wood business in this country,” Fischer said.

The tariffs set to take effect include a 10% ad valorem duty on softwood and lumber and 25% duties on kitchen cabinets, vanities, components and upholstered wooden products. The tariffs on upholstered wooden products are set to rise to 30% on Jan. 1, 2026, while the duties on on kitchen cabinets and vanities are scheduled to hit 50% Jan. 1, according to the Wood Products Manufacturers Association, a national trade association for companies in the secondary wood products industry. Its members produce furniture, cabinetry, millwork, flooring and architectural components.

President Donald Trump has said the tariffs are necessary to reduce foreign reliance and encourage industrial resilience to strengthen critical infrastructure, industrial resilience and manufacturing jobs domestically, the association said. By raising the prices of foreign-made goods, U.S. companies are expected to benefit, according to Trump’s strategy, though others don’t agree.

Some U.S. manufacturers that rely on foreign components or manufacturing production say they will be disadvantaged by the tariffs. The U.S. Supreme Court agreed on Sept. 9 to hear a lawsuit filed by a Chicago-area manufacturer, Learning Resources, contending the law President Trump is relying on is illegal.

The case, Learning Resources Inc. v Donald J. Trump (No. 24-1287), is set for oral argument the first week of November, when the United States’ highest court will consider whether the International Emergency Economic Powers Act (IEEPA) authorizes tariffs imposed by President Trump pursuant to “national emergencies declared or continued” and his various executive orders. It also will consider whether the same statute unconstitutionally delegates legislative authority to the President, according to court documents.

The IEEPA permits the president, upon a valid emergency declaration, to “investigate…prevent or prohibit...any importation or exportation of, or any right, power or privilege with respect to any property or transactions in which any foreign country or a national thereof has any interest.”

Learning Resources’ 2024 court filing said, “until now, no President in IEEPA’s nearly 50-year history has ever invoked it to impose tariffs - let alone the sweeping worldwide tariffs imposed pursuant to the executive orders challenged here.”

From Fischer’s perspective in the supply chain, U.S. suppliers are facing unfair competition from foreign companies. The U.S. has wood and wooden components to sell, but overseas countries have undercut the prices, putting the U.S. at a disadvantage, Fischer said.

“They will not let us sell into their countries, but they want to sell into ours,” he said. “It’s very unfair. I think these tariffs are making it much fairer,” he said.
Fischer, who also is a lumber inspector, buys from saw mills in the northern United States, he said.

Other business owners in northeast Wisconsin and the Upper Peninsula aren’t certain yet how the new tariffs will affect their businesses.

Jeff Goudreau, owner of Vulcan Wood Products in Vulcan, Mich., makes home heating fuel pellets, purchasing wood from lumber mills and selling the pellets for about $220 a ton.

Since the trade wars escalated this year, he said his sales are down about 25% because he’s not selling products to Canada any longer. Today, he primarily ships the wood fuel to Wisconsin and Michigan.

“I lost a bunch of customers. I understood that was going to happen,” he said. People don’t all agree about the tariffs, he said.

For real estate developers, who price new homes in part based on the cost of construction, including wooden products and cabinetry, the tariffs could be the latest challenge in an ongoing string of price increases and economic policies affecting new construction.

But Mike Smits, who is building new homes and apartment buildings in Crivitz, said the tariffs probably won’t affect his business too much. “That’s not the reason for success or failure. It’s just part of the process.”

“There’s always something in this industry, whether it’s interest rates, gypsum prices or steel tariffs or wood tariffs,” he said. “You just keep going.”

He buys materials from Crivitz Lumber and hires local contractors.

“Every one of our contractors is a local contractor in Crivitz. That’s always super important to us. As far as materials, they come from everywhere,” including Canada, he said.

As for the tariffs’ effect, it won’t change his plans. “It’s business as usual,” he said.