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Pallet C e nt ral • S e ptem be r- O ctobe r 2 0 25 25 T he hardwood lumber industry has long been a backbone of North American manufacturing and a pillar of global trade. In 2025, it stands at a decisive crossroads, caught between the aftershocks of trade wars, evolving environmental regulations, and shifts in end-user demand. Unlike previous decades, today's producers, processors, and downstream customers, particularly within the National Wooden Pallet & Container Association (NWPCA), confront threats that are both global and deeply local in impact. e National Hardwood Lumber Association (NHLA), under Executive Director Dallin Brooks, is tasked with leading the sector through disruption. As Brooks puts it, the current hardwood market is "clouded with uncertainty, and there is a lot of concern and anxiousness about the state of the industry due to retaliatory tariffs hurting the export market, due to a very low domestic market consumption going on, and because there isn't a lot of profitability right now in grade lumber," a sentiment that reverberates from sawmills to furniture factories. is feature article offers a comprehensive exploration of the hardwood market's shifting realities and prospects for resilience, drawing on industry insights and Brooks's leadership perspective. Balancing Crisis And Strategy In turbulent times, leadership transcends routine administration. Brooks's daily routine now blends advocacy, market intelligence, and hands-on crisis response. Rather than simply representing members to policymakers, he is charged with actively guiding them through volatile pricing, rapid-fire regulatory changes, and unprecedented volume swings. Demand for domestic and export hardwood lumber are trending low right now. "e export retaliatory tariffs on the US hardwood lumber are fluctuating almost on a daily basis," said Brooks. His priorities now include synthesizing complex data into clear guidance, maintaining morale in the face of adversity, and advocating for member- friendly trade policies. Regular webinars, market updates, and peer forums underscore the NHLA's shift from tradition to relentless adaptation. State Of The Market Across the United States and Canada, hardwood markets have simultaneously contracted and become more unstable. Industrial applications, especially railway ties and wooden pallets, have provided some shelter, but even these categories face erosion from competitive softwood products. Production capacity has shrunk at an alarming pace: more than 40 mills have closed in 2025 alone, suggesting a crisis well beyond a normal business cycle. "We've seen almost 40 mill closures so far in 2025, and you can't blame all those closures on [retaliatory] tariffs because tariffs have only been in effect for a couple of months," says Brooks. ese shutdowns ripple through regional economies, reducing employment and choice for buyers, while triggering more expensive and unpredictable logistics. In many communities, the sight of shuttered sawmills symbolizes not only economic loss but also the shrinking prospects of small towns and the regional manufacturing base. Trade Disrup ons, Tariffs, And The China Shock No single factor has reshaped the market as dramatically as the loss of China as North America's principal export destination. Brooks recalls, "Tariffs on wood entering Canada apply if it moves past Canada. Tariffs on wood entering China that exceed its value also apply. China is a low-cost commodity provider, so even a small tariff makes a big difference in their costs." e 2017 trade war marked a sharp break, says Brooks: "We saw in 2017, when China had the first trade war with this administration, that they left and never came back." Since then, industry efforts to replace Chinese demand have fallen short. While new buyers have been found in the Middle East, Europe, and Southeast Asia, these markets cannot absorb the volume or provide the predictability that China once did. Meanwhile, each new round of tariffs and the resulting retaliatory measures has added cost, complexity, and risk to every shipment leaving North American ports. Domes c Consump on: An Engine That Never Fully Recovered Beyond export woes, the most significant challenge may be at home. "Domestic consumption has been down since the 2008 financial crisis and has not recovered," explains Brooks. "In the 17 years since, we are struggling with that, and it impacts everything else, including things like the pallets and the railway ties and the board and mat timber markets, which are also down." Construction slowdowns, changing consumer preferences, and the rise of composite materials have all dampened demand for traditional hardwoods. is ongoing shortfall means producers— already coping with lost export sales— are forced into fierce competition for a stagnant pool of buyers. Not only does this compress operating margins but it also discourages the sort of capital investment and product innovation needed for long- term sector health. Vola le Supply And Species- Specific Impacts Although Brooks does not single out species, the disruption of both export and domestic markets has affected nearly every hardwood variety, including red oak, white oak, hard maple, and more. Where mills have shut, regional shortages may develop, even as surplus inventories in underserved markets trigger price drops. is irregularity has made both procurement and sales planning an exercise in constant

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