New Zealand timber spared US tariff pain – for now

When US President Donald Trump unveiled a new round of import tariffs in April 2025, New Zealand wood exporters were relieved to learn their products had been spared. Timber and wood products were temporarily exempt from the initial 10% tariff due to a pending trade investigation into US lumber imports.

Although the exemption is only temporary, Mark Ross, chief executive of the Wood Processors and Manufacturers’ Association (WPMA), described it as a welcome reprieve. “We now wait for completion of the section 232 investigation as to what the future holds for imported New Zealand timber and lumber products entering the United States,” Mark said.

The United States remains New Zealand’s third-largest market for forest products, behind China and Australia, with about USD 215 million of radiata pine exported to the US in 2024. Overall, New Zealand exports to the US totalled $5.40 billion that year, with wood and wood products contributing $224 million, making timber a key component of the bilateral trade relationship.

Radiata pine is highly valued by American buyers for its consistent quality and appearance, serving both the home-building and DIY retail markets. “Although the $US215 million is minor when compared to the total global imports of $US2.3 billion of timber and lumber products into the United States, this trade is valued by both the New Zealand producers and the American DIY customers,” Ross noted.

A tariff deferred — for now

The exemption stems from a Section 232 national security investigation, launched on 2 March 2025 under the US Trade Expansion Act of 1962. Overseen by Commerce Secretary Howard Lutnick, the inquiry aims to determine whether reliance on imported lumber poses a national-security risk. The final report is expected to be released in late November 2025.

Initially, timber and lumber products were listed for a baseline 10% tariff, part of a broader tariff package that included 25% duties on wooden furniture and cabinetry, as announced by the White House on September 30, 2025. However, the timber component was later deferred, and New Zealand products currently remain exempt, according to the New Zealand Ministry of Foreign Affairs and Trade’s April 2025 market update.

A range of US industry groups, including the National Association of Home Builders (NAHB) and the American Building Materials Alliance, publicly opposed tariffs on imported lumber. These groups argued that such measures would exacerbate the housing affordability crisis, drive up construction costs, and hinder rebuilding efforts in regions affected by wildfires. The NAHB, in its March 2025 submission to the Department of Commerce, warned that “tariffs on building materials, including lumber, would directly harm American homebuyers.”

Domestic timber prices had already surged by more than 30% in early 2025 amid strained US supply chains. For the American construction industry, access to high-quality, kiln-dried New Zealand radiata pine was considered too important to jeopardise. As Mark Ross put it: “It’s a growth market, and there’s a shortage of lumber and timber products here for the home construction and the do-it-yourself market, and that’s what we feed into.”

NZ industry cautiously awaits investigation outcome

Back in New Zealand, both government and industry leaders are adopting a wait-and-see approach. The WPMA has not submitted an official response to the US investigation, following government advice. Trade and Investment Minister Todd McClay’s office confirmed ongoing discussions with US counterparts to clarify the scope of current exemptions and potential future conditions.

The US market remains strategically important as New Zealand’s forestry sector seeks to diversify away from China. Between 15 and 18 mills across New Zealand regularly supply lumber, clear pine boards, and primed products to American distributors, who prize the wood for use in framing and finishing residential construction.

The outcome of the Section 232 review will determine whether New Zealand timber retains tariff-free access to the US or faces new trade barriers. Possible outcomes include continued exemption, the introduction of delayed or conditional tariffs, or targeted restrictions based on perceived supply chain risks.

For now, New Zealand’s timber exporters enjoy a temporary reprieve, but uncertainty looms. As Mark Ross of the WPMA summed up, “We are just going to have to wait. We don’t know.”

Beyond the U.S.: The case for market diversification

The numbers tell a compelling story. In the July 2025 quarter, exports to the U.S. fell about three percent, while shipments to other destinations grew by nearly 11%. The message is clear: when one door narrows, others must open quickly.

The broader backdrop is encouraging. The Food and Agriculture Organisation forecasts global wood consumption to increase by more than six per cent by 2030, driven by urbanisation, green building and a global pivot to bio-based materials. For New Zealand businesses, the opportunity lies in supplying that demand, but doing so through multiple channels, not just the traditional giants of China and the U.S.

With domestic harvest levels stabilising and log supply unlikely to expand dramatically, growth will need to come from value addition and market reach. India, the Middle East and the wider Asia-Pacific region each offer fertile ground.

India: Rediscovering an old partner

Few markets illustrate untapped potential better than India. New Zealand’s forestry exports there peaked at NZ$326 million in 2019 but slumped to just $64 million five years later as trade in raw logs slowed. Now the trend is reversing.

Earlier this year, New Zealand Forest Managers (NZFM) resumed pine-log exports to India for the first time since 2020, signalling renewed confidence. Historically, shipments averaged between 40,000 and 50,000 JAS m³ per year; the company now aims to expand into higher-value products, such as structural and interior timbers, rather than focusing solely on industrial uses.

Government-to-government engagement has reinforced that momentum. In June 2025, New Zealand and India agreed to strengthen cooperation on sustainable forest management and processing. The result has been a surge in wood exports, from NZ$9.5 million in 2023 to an estimated $76 million this year. Pulp exports have more than doubled.

India’s vast construction sector, alongside a population exceeding 1.4 billion, gives it unmatched scale. The government’s housing programmes increasingly specify sustainable building materials, creating a natural alignment with New Zealand’s brand of environmentally certified radiata pine.

To succeed in India, exporters must go beyond raw commodities. Certification under FSC or PEFC, strong carbon-accounting credentials, and partnerships with Indian processors or distributors are now prerequisites. Just as crucial is storytelling, positioning “New Zealand Radiata” as a sustainable, high-quality choice for modern construction.

The Middle East: Building on a tariff-free advantage

While India offers scale, the Middle East, particularly the United Arab Emirates, offers access. In September 2024, New Zealand concluded a trade agreement with the UAE that eliminated tariffs on all wood-product imports. Though the trade base is still modest (around NZ$10 million in annual exports), it is growing quickly.

UAE demand for timber tripled last year as developers embraced sustainability-driven design. Timber is becoming a prestige material in luxury interiors and low-carbon architecture, a trend tailor-made for New Zealand producers of engineered or finished wood.

Duty-free status gives Kiwi exporters a clear edge over competitors from North America and Europe, many of whom still face import levies. More importantly, it provides a test market for premium lines such as engineered panels, acoustic timbers, and prefabricated components.

Success here will depend on local partnerships and attention to specification. Distributors in Dubai and Abu Dhabi value consistency and certification, while buyers in the region’s high-end real-estate projects look for provenance and design appeal. Carbon-neutral production and traceable supply chains can be decisive selling points.

“The Gulf is moving fast towards sustainable construction, and New Zealand wood fits that story perfectly,” says a Wellington-based trade consultant involved in the UAE negotiations. “It’s not about volume, it’s about visibility, reliability and brand.”

Asia-Pacific and ASEAN: Quiet contenders

Beyond the large markets, a quieter revolution is underway across Southeast Asia. Nations such as Vietnam, Malaysia, the Philippines and Thailand are investing heavily in housing and infrastructure. As their middle classes expand, so does the demand for furniture, flooring and interior timber finishes.

Many of these countries import a significant portion of their wood, but rising environmental scrutiny is prompting them to shift toward certified, sustainably sourced products. This is where New Zealand’s reputation, stable governance, transparent forestry practices, and high-quality radiata pine come into play.

While China remains New Zealand’s dominant customer, accounting for approximately 57% of log exports in 2024, it is prudent not to treat that as permanent. Establishing a footprint in emerging Asian economies will require patient investment, including adapting products to local building standards, forming distribution alliances, and participating in trade missions to understand cultural and regulatory nuances.

The Ministry for Primary Industries and New Zealand Trade and Enterprise are already encouraging exporters to explore these opportunities, providing funding, market insights and buyer introductions. For smaller firms, such programmes can lower the cost of entry.

Moving from logs to brands

The shift from commodity logs to branded, processed timber is no longer theoretical—it is an economic imperative. Value-added wood products account for only about 15% of New Zealand’s export volume, yet they deliver roughly 40% of the sector’s revenue. The return on investment is evident.

Modern processing technologies, including kiln drying, machining, cross-laminated timber, and glulam production, enable exporters to move up the value chain. Coupled with a strong brand narrative around sustainability, this creates differentiation that tariffs cannot easily erode.

Investment in domestic processing capacity also strengthens the local economy. Every additional stage of processing supports regional employment and builds export resilience. The challenge lies in scaling that capacity while managing fluctuating log supplies and maintaining competitiveness with low-cost producers.

Intelligence, flexibility and collaboration

Trade conditions are fluid, and smart exporters treat policy shifts as part of the landscape rather than as shocks. Tracking tariff developments, non-tariff barriers and freight disruptions has become a core business discipline.

Firms that weather turbulence well tend to maintain flexible supply chains, able to redirect shipments, adjust volumes, and negotiate logistics on shorter cycles. They also diversify customer relationships, ensuring no single buyer or region accounts for a disproportionate share of revenue.

Sustainability credentials remain another critical differentiator. Environmental certification, traceability systems, and transparent carbon accounting not only appeal to buyers, but also often determine eligibility for government procurement or major private contracts overseas.

Government agencies and industry bodies are also pivotal. Collaboration between the Forest Owners Association, the WPMA and the Ministry for Primary Industries has helped secure market intelligence and organise trade delegations. Business owners who engage actively with these networks gain early visibility of emerging opportunities and risks.

Challenges and opportunities

Forecasts from Treasury suggest forestry exports could edge back toward NZ$6 billion in 2025 after a modest dip last year. However, without fresh processing investment and new market penetration, growth is expected to plateau.

Constraints on harvestable forest area, ageing stands and limited domestic mill capacity will cap output. At the same time, global demand for sustainable materials continues to rise, and the shift toward low-carbon construction offers long-term promise.

The medium-term picture is therefore nuanced: steady but unspectacular growth unless exporters innovate. Those who treat diversification as a strategic priority, rather than a contingency, will capture a larger share of that expanding global demand.

The twin examples of India and the UAE illustrate what adaptation looks like in practice. NZ Forest Managers’ return to the Indian market, expanding from log exports into interior and structural timber, demonstrates that repositioning toward higher value is both possible and profitable. Meanwhile, the NZ-UAE trade pact’s tariff-free framework offers a blueprint for leveraging diplomatic advantage into commercial gain.

Both cases demonstrate that when trade winds shift, nimble businesses can still chart a profitable course, provided they read the horizon early and adjust their sails accordingly.

The way forward

The sector’s strengths, sustainable management, product quality and a global reputation for reliability, remain intact. What is now required is a willingness to explore, invest, and brand boldly.

Those who pivot from commodity exports to value-added, certified timber, who cultivate new markets in India, the Gulf and Southeast Asia, and who build strategic partnerships underpinned by strong branding and government collaboration will set the pace for the next decade.

The forests of New Zealand have long been a renewable resource. Today, they are also a renewable opportunity, one that will reward those business owners ready to look beyond old borders and plant new roots in the world’s fastest-growing markets.