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Presented by Brian Ledgerwood Industry & Analysis Office of Materials Industries International Trade Administration U.S. Department of Commerce
Expanding Global Market Opportunities for
U.S. Building Product Exports
Presented to
Appalachian Hardwood Manufactures, Inc.
July 30, 2018
AGENDA
I. TRADE POLICY ISSUES
NAFTA Renegotiation
U.S.-Canada Softwood Lumber
Section 232 Tariffs
Section 301 Tariffs
Executive Orders
China Log Import Inspections
II. IDENTIFYING PROMISING EXPORT MARKETS FOR U.S.
BUILDING PRODUCTS
Traditional tools
Identifying new market demand
Shifting the focus to highlight new growth
I. TRADE POLICY ISSUES
President’s Trade Policy Agenda – February 2018
5 Major Pillars
1) Supporting Our National Security
2) Strengthening the U.S. Economy – Manufacturing, Jobs
3) Negotiating Better Trade Deals – Ensure U.S. Industry
Competitiveness
4) Aggressively Enforcing U.S. Trade Laws – Ensure Level Playing Field
5) Reforming the World Trade Organization
NAFTA RENEGOTIATION
Principal Areas of Interest:
Market access (tariffs) – Continue duty-free market access for forest
products
Trade facilitation – Supportive customs rules and border procedures
to smooth trade flows and reduce costs
Regulatory –Increase transparency, cooperation, and regulatory
coherence
Fair competition – Enforcing trade laws, eliminating market-
distorting subsides and practices, fighting currency manipulation and
putting constraints on State Owned Enterprises (SOEs)
Primary Focus:
NAFTA has generated significant gains for forest products trade
Goal: Maintain existing benefits & expand trade opportunities via
free and fair trade
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83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Bill
ion
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Wood and Articles of Wood Wood Pulp Paper and Paperboard
1993
NAFTA
U.S. Forest Products Exports to NAFTA Markets
U.S.-CANADA SOFTWOOD LUMBER
• Top Trump Administration priority
• Both sides showed strong interest in moving beyond AD/CVD remedies
• Substantial bilateral engagement toward new Softwood Lumber
Agreement (SLA)
• Timeline:
• October 2006 - the previous SLA brought into force
• October 2015 - the previous SLA expired
• October 2016 – end of cool-off period
• December 15, 2016 - DOC initiates AD/CVD investigations
• January 3, 2018 - DOC publishes the orders on AD/CVD investigations
• Company-specific expedited reviews – 30 days after publication of the
order
• January 2019 – Requests for Administrative Review
SECTION 232: STEEL AND ALUMINUM IMPORTS
Section 232 Investigations: The Effect of Imports on the National Security.
Conducted under the Trade Expansion Act of 1962.
Two Section 232 investigations since the United States joined the WTO:
1999 Crude oil
2001 Iron and steel
February 16, 2018: Steel and Aluminum Section 232 Investigation Reports
Released by Secretary of Commerce
March 8, 2018: Presidential Proclamation
25% tariff on certain steel imports
10% tariff on certain aluminum imports
Exemptions for certain countries Canada, Mexico, European Union (until June 1, 2018)
South Korea (permanent)
Negotiated agreements: Australia, Argentina, Brazil
March 18, 2018: Tariff Exclusion Application Process Announced (companies)
May 23, 2018: Secretary Ross Announces Initiation of 232 Investigation on
Autos/Auto Parts
SECTION 301 POTENTIAL REMEDIES
Investigation of government of China’s acts, policies and practices related to technology
transfer, intellectual property and innovation under Section 301 of the Trade Act of 1974.
Section 301 Investigations launched August 2017. Found China’s policies result in harm to
the U.S. economy of at least $50 billion per year.
March 22, 2018: President Trump directed the following actions in response:
WTO Case; 25% Duties; Restrictions on PRC investment obtaining U.S. technologies
April 6, 2018 USTR publication of product list subject to tariffs for public comment “list 1”:
May 11–22, 2018: Comments (2,878 received); Public hearings; Post-hearing comments
June 20, 2018 USTR publishes Notice of Action – $34 Billion Trade Action
July 11, 2018 – Docket Open for Exclusion Requests, Deadline October 9, 2018
June 20, 2018 USTR Proposes additional $16 Billion Trade Action – publication of “list 2”
July 24-25, 2018 – Tariff Panel Hearings on $16 Billion Trade Action, Post-hearing
comments forthcoming
July 17, 2018 USTR Proposes Supplemental $200 Billion Trade Action
Comment period open; Hearings scheduled for August 20–23, 2018
EXECUTIVE ORDERS (EO)
January 2017 Overly Burdensome Regulations Impeding Trade
March 2017 Trade Deficits
April 2017 Buy American and Hire American
April 2017 Addressing Trade Agreement Violations and
Abuses
December 2017 Critical Minerals
CHINA LOG IMPORT INSPECTIONS
Beginning in early May, U.S. log exporters report increase in
quarantine/phytosanitary inspections at key Chinese ports
China’s General Administration of Customs (GAC): pests detected in
shipments of logs from U.S.
Inspections are within existing Chinese requirements
Office of the U.S. Trade Representative is USG point of contact
Joan Hurst Director for Agriculture, Office of the USTR
E-mail: [email protected]
Julia Howe Director for China, Office of the USTR
E-mail: [email protected]
II. IDENTIFYING EXPORT MARKETS FOR U.S. BUILDING PRODUCTS
Global opportunity
U.S. products are globally competitive on a
level playing field
U.S. building products export markets are
“dense”
The vast majority of U.S. exports go to the
Top 10 markets – 75% in 2017
Canada and Mexico dominant + China
increasing export market share
In the past 10 years, there have been only
modest changes to the Top 10 market list
Combined and even subsector-specific export
trends alone do not tell us enough to identify
opportunities
U.S. Building Products Total Annual U.S. Exports
2018 Projected: $88.6 billion (based on Jan-May data)
Wood Products 2016: $8.3 billion 2017: $8.1 billion 2018: $8.7 billion projected
Plumbing Products 2016: $1.07 billion 2017: $1.09 billion 2018: $1.2 billion projected
Asphalt 2016: $599 million 2017: $610 million 2018: $660 million projected
HVAC Equipment 2016: $18.3 billion 2017: $18.5 billion 2018: $18.3 billion projected
Plaster & Gypsum Board 2016: $233 million 2017: $207 million 2018: $219 million projected
Cement & Concrete 2016: $442 million 2017: $466 million 2018: $435 million projected
Metal Products 2016: $22.2 billion 2017: $22.9 billion 2018: $24.8 billion projected
Insulation 2016: $991 million 2017: $1.04 billion 2018: $1.12 billion projected
Masonry & Stone 2016: $211 million 2017: $225 million 2018: $222 million projected
Electrical Systems & Lighting 2016: $20.5 billion 2017: $21.3 billion 2018: $22.7 billion projected
Appliances 2016: $3.12 billion 2017: $3.11 billion 2018: $3.11 billion projected
Glass 2016: $1.1 billion 2017: $857 million 2018: $767 million projected
Paints, Adhesives & Plastics 2016: $4.1 billion 2017: $4.3 billion 2018: $4.5 billion projected
Doors & Windows 2016: $768 million 2017: $751 million 2018: $680 million projected
Miscellaneous Other 2016: $1.04 billion 2017: $1.16 billion 2018: $1.21 billion projected
PLUMBING PRODUCTS
2017 U.S. Exports:
$1.3 Billion
HVAC
2017 U.S. Exports:
$18.5 billion
WOOD PRODUCTS
2017 U.S. Exports:
$8.1 billion
6 KEY BUILDING PRODUCT SUBSECTORS COMBINED U.S. EXPORTS 2017: $32.7 BILLION
(= approx. 38.6% of tot. U.S. build’g prod. exports of $84.5 billion in 2017)
WINDOWS & DOORS
2017 U.S. Exports:
$749 million
LIGHTING
2017 U.S. Exports:
$3 billion
INSULATION
2017 U.S. Exports:
$1 billion
214 U.S. building
product export
markets around the
globe
Exports evenly split
between developed
and developing
countries ($ volume)
2017 Export Competitiveness Profile
Advanced/
Developed
Countries
50.7%
Developing
Countries
49.3%
U.S. Building Product Export Destinations
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2009 2010 2011 2012 2013 2014 2015 2016 2017
Bill
ion
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U.S. Building Product Export Portfolio Growth 6 Key Subsectors
PLUMBING WOOD INSULATION HVAC WINDOWS LIGHTING
Growth from $24.2 billion to $32.6 billion since 2009
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PLUMBING WOOD INSULATION HVAC WINDOWS LIGHTING
Bill
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U.S. Export Trends 6 Key Building Product Categories
2012 2013 2014 2015 2016 2017
U.S. Building Product Exports:
Traditional Major Market Approach
Top 10 Markets 2007 Top 10 (71% of total exports) 2017 Top 10 (75% of total exports)
Market % Total Market % Total
Canada 32.8% 1 Canada 26.6%
Mexico 14.7% 2 Mexico 18.0%
China 5.8% 3 China 13.5%
Japan 4.4% 4 Japan 3.9%
UK 3.2% 5 UK 3.0%
Germany 2.7% 6 Germany 2.8%
Korea 2.4% 7 Korea 2.2%
Saudi Arabia 1.8% 8 Saudi Arabia 1.8%
France 1.6% 9 Australia 1.8%
Australia 1.5% 10 France 1.5%
19
Major Market Approach
Top Markets: Building Products and Sustainable Construction HVACR, lighting, plumbing products, wood products, insulation, doors and windows, glass
• U.S. export market rankings (2018) Driven by existing subsector-specific trade data
• Global trends driving opportunity for 7
sub-sectors
• State of global trade
• Exporter challenges and USG resources
• 10 country case studies (market
overviews)
www.trade.gov/topmarkets
Identifying Growth and Export Market Potential The 6 subsectors
Market Criteria
Growth trend: positive 5-year compound annual growth rate
(CAGR) for U.S. export growth
Recent demand: positive YoY demand growth 2016-2017
New demand in 2017: more than a $1 million increase in
demand for U.S. exports between 2016 and 2017
Windows & doors
Plumbing products
Lighting
Wood products
HVAC
Insulation
Markets that Fit the Criteria Positive 5-year CAGR + positive YoY growth + >$1 million
new U.S. export demand in 2017
PLUMBING
WOOD
PRODUCTS
HVAC
WINDOWS
& DOORS
LIGHTING
INSULATION
13 MARKETS
12 MARKETS
12 MARKETS
7 MARKETS
18 MARKETS
8 MARKETS
Growing Markets for U.S. Wood Products
Asia beyond China
Next Generation Asia markets:
Vietnam
Korea
Malaysia
Cambodia
Caribbean
Jamaica
British Virgin Islands
Turks & Caicos
Dominica
Saint Maarten
Anguilla
Antigua Barbuda
Wood Products: Market Growth and New Demand
MARKET U.S. EXPORTS
2017
5-yr
CAGR
YoY
Growth
New 2017
YoY Demand
WORLD 8,079,831,657 -0.3% -2.1%
China 3,189,403,183 14.2% 25.7% 651,855,203
Vietnam 264,893,085 6.8% 22.7% 48,981,689
India 45,118,569 -1.0% 49.1% 14,861,130
Korea 102,652,721 -8.3% 9.2% 8,638,933
Jamaica 41,604,597 5.2% 22.5% 7,630,404
Pakistan 61,733,664 17.2% 12.7% 6,971,879
British Virgin
Islands 10,993,765 11.2% 65.8% 4,361,101
Turks & Caicos 12,492,366 23.7% 49.8% 4,154,045
Malaysia 34,346,306 -0.1% 9.1% 2,864,198
Lebanon 10,098,532 -4.8% 38.2% 2,793,357
Dominica 4,183,791 14.3% 66.0% 1,663,084
Estonia 9,935,790 0.0% 18.4% 1,543,030
Saint Maarten 6,286,651 7.3% 30.1% 1,453,417
Anguilla 3,609,886 18.4% 52.7% 1,245,951
Cambodia 1,743,471 94.7% 208.1% 1,177,556
Antigua-
Barbuda 10.9% 14.0% 1,118,226
12 markets show
Positive 5-year demand growth
positive YoY growth more than $1
million new U.S. export demand in 2017
Ranked by 2017 New YoY Demand
Note: * 2018 annualized
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5
10
15
20
25
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50
100
150
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250
300
350
400
450
2010 2011 2012 2013 2014 2015 2016 2017 2018*
Lin
es:
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Exp
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Top
US
Exp
ort
Co
unt
ires
Mill
ion
s
U.S. Exports of Hardwood
Canada Vietnam UK Mexico Spain Japan Germany WORLD China
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200
400
600
800
1,000
1,200
1,400
1,600
1,800
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60
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2010 2011 2012 2013 2014 2015 2016 2017 2018*
Lin
es: W
orl
d\P
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Im
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to U
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Mill
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s
Top
Imp
ort
ing
Co
un
trie
s to
US
in M
illio
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Hardwood Imports into U.S.
Canada Germany France Chile Italy WORLD China
Note: * 2018 annualized
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Thank You
Brian Ledgerwood
Senior International Trade Specialist
Office of Materials Industries
U.S. Department of Commerce
Tel: 202.482.3836
