Since 2018, the Sino-US trade friction has continued to escalate, with the US imposing high tariffs on Chinese goods, strengthening technical barriers, and tightening environmental certification requirements. These measures have severely disrupted the global economic order and multilateral trade system, introducing significant uncertainties to Sino-US trade in forest products.
On February 1 this year, the US announced additional tariffs on Chinese exports. Subsequently, the US repeatedly raised tariffs on Chinese goods. It was not until May 12 that the Sino-US Joint Statement on Economic and Trade Talks in Geneva was released, in which both sides pledged to establish a mechanism for continued consultations on economic and trade relations following the implementation of relevant measures.
Although the Sino-US trade negotiations have achieved a breakthrough, the international environment remains volatile, with multiple risks intertwined. Against this backdrop, Shandong's timber industry cannot remain unaffected and must actively explore systematic response strategies to seek development opportunities amid challenges and achieve sustainable industrial growth.
Current Status of Shandong's Timber Industry
In 2023, Shandong Province had over 49,500 wood processing enterprises, ranking second in China in terms of industrial scale. According to the 2024 Shandong Statistical Yearbook, the province's output of wood-based panels reached 84.839 million cubic meters, including 69.403 million cubic meters of plywood, 7.179 million cubic meters of fiberboard, and 8.066 million cubic meters of particleboard. The output of decorative surface panels for wood-based panels was 23.626 million square meters. In the flooring sector, solid wood flooring output was 399,000 square meters, while engineered wood flooring reached 20.954 million square meters. The furniture manufacturing industry produced 53.117 million pieces of furniture, with wooden furniture accounting for 39.195 million pieces, dominating the sector. In the paper industry, pulp production was 5.676 million tons, and machine-made paper and paperboard output totaled 26.372 million tons.
Combined Solar-Assisted Veneer Drying System
Data released by Jinan Customs showed that in 2024, Shandong's wood product exports were valued at 22.04 billion yuan, and furniture exports reached 40.46 billion yuan, down 5.8% and 3.6% year-on-year, respectively. The export structure of Shandong's timber industry is diverse, including wood-based panels, wooden furniture, and paper products. Before the Sino-US trade friction, these products held a significant share in the US market, contributing substantially to Shandong's exports.
From a national perspective, Sino-US trade in forest products, though still sizable, has seen declining total volume and market share in recent years. In 2024, bilateral trade in forest products between China and the US amounted to $14.457 billion, accounting for 13.31% of China's total forest product trade-still the largest share but significantly lower than the peak of 21% in 2016.
Of this, China's forest product exports to the US were $10.937 billion (75.64% of the total Sino-US forest product trade), primarily consisting of wooden furniture, paper and paper products, and wood-based panels, with Shandong's timber industry contributing a notable portion. Imports from the US were $3.522 billion (24.36%), mainly comprising raw materials such as wood pulp, logs, and sawn timber, which provide essential support for Shandong's timber industry.
Impact of Sino-US Trade Friction on Shandong's Timber Industry
(1) Unstable Raw Material Supply
China's dependence on US forest product imports is relatively low, at 7.37% in 2024, with log import dependence at 13.79%, sawn timber at 10.77%, and wood pulp below 10%. However, for Shandong's timber industry, market instability in the US has significantly affected raw material procurement and production operations, while transportation costs have risen due to trade uncertainties.
Wood Processing Workshop
(2) Export Market Obstruction
Recent trade friction has increased costs for China's timber industry, reducing its market share in the US. Shandong's furniture manufacturers, which rely heavily on the US market, have been particularly impacted. Strict non-tariff barriers imposed by the US further hinder market access. Nationally, China's forest product export dependence on the US was 17.97% in 2024-moderate but significant for certain sectors. Wooden furniture exports (29.89% dependence) were highly affected, wood products (17.94%) moderately affected, and wood-based panels less so but still impacted.
(3) Constrained Industrial Development
Amid broader challenges in China's forest product trade, Shandong's timber industry faces similar difficulties. Increased market uncertainty has made firms hesitant to invest in R&D, equipment upgrades, or capacity expansion, hindering industrial innovation and upgrading.
Strategies for Shandong's Timber Industry to Overcome Challenges
(1) Strengthen Policy Support to Build a Solid Foundation
- Establish a coordinated policy resource mechanism, integrating information on policies, raw material supply, market demand, and technological innovation via digital platforms.
- Enhance government-business communication, with multi-departmental early warning systems to monitor international trade policy changes.
- Provide specialized loans for timber enterprises, simplifying approval processes and ensuring funds are used for R&D and new market development.
(2) Upgrade the Value Chain to Enhance Competitiveness
- Increase R&D investment in alternative materials (e.g., bamboo composites, straw-based panels) through government subsidies (¥500,000–2 million per project).
- Promote digital transformation (e.g., industrial IoT, digital twins) with tax incentives and technical support.
Children's Outdoor Furniture
(3) Strengthen Supply Chain Resilience
- Diversify raw material sources by supporting domestic fast-growing plantations and fostering long-term partnerships with suppliers in Russia, Canada, and New Zealand.
- Encourage cross-border production collaboration, such as establishing processing bases in Belt and Road Initiative (BRI) countries with government-backed incentives.
(4) Improve Corporate Capabilities and Market Expansion
- Enhance international trade skills through training programs on trade rules and marketing strategies.
- Develop differentiated products for emerging markets (e.g., ASEAN, Africa, Latin America), leveraging RCEP tariff benefits.
(5) Foster Industrial Ecosystem Restructuring
- Form industry alliances (e.g., Yellow River Timber Innovation Alliance) for joint R&D and resource sharing.
- Build international training centers and industrial parks (e.g., Sino-Malaysian "Twin Parks" model) to promote global standards and cooperation.
Conclusion
Shandong's timber industry should adopt a phased strategy:
- Stage 1: Product globalization-target international demand and strengthen branding.
- Stage 2: Production globalization-optimize global capacity layout.
- Stage 3: Value chain globalization-elevate position in global division of labor.
- Stage 4: Full enterprise globalization-achieve sustainable global growth.
To ensure effective implementation, measures include:
- Policy: Secure subsidies and tax incentives.
- Finance: Expand funding channels.
- Talent: Strengthen industry-academia collaboration.
- Market: Explore new markets and protect brands.
- Industry Synergy: Foster upstream-downstream collaboration and industrial parks.
By systematically addressing trade friction, Shandong's timber industry can achieve sustainable development.
