The Situation
In April 2025, the United States imposed tariffs on a range of imports, including timber. New Zealand wood exporters were temporarily exempted, pending the outcome of a Section 232 national security trade investigation into imported lumber launched on 2 March 2025. The investigation’s final report is expected in late November 2025. Until the report lands and a decision is made, New Zealand exporters face uncertainty rather than immediate tariff impact.
What is at stake is significant. New Zealand exported USD $215 million of radiata pine to the United States in 2024. Total forestry exports to the US reached $224 million, making America the third-largest market for New Zealand forest products after China and Australia. Domestic US timber prices surged more than 30 percent in early 2025 as buyers adjusted to the new tariff environment — a signal of how dependent US construction markets are on imports for certain product types.
The Exemption Rationale
New Zealand’s exemption is understood to reflect the specific characteristics of radiata pine — a species grown commercially primarily in New Zealand and Chile — and its role in supplying US construction markets with a product not readily available domestically. Fifteen to eighteen New Zealand mills supply American distributors with kiln-dried, precision-engineered timber products valued for their dimensional stability in framing applications. The case for exemption rests on the absence of a domestic US substitute rather than on diplomatic grounds alone.
Diversification in Progress
The trade uncertainty has accelerated diversification efforts already underway. India presents the most dramatic recent growth story: New Zealand timber exports to India surged from NZ$9.5 million in 2023 to an estimated $76 million in 2025 — a near-eightfold increase in two years, though still well below the NZ$326 million peak recorded in 2019. Southeast Asian and Middle Eastern markets are also receiving increased attention from New Zealand exporters seeking to reduce dependence on any single major market.
China remains dominant, accounting for approximately 57 percent of log exports in 2024. The concentration of export volume in log form rather than processed timber is a strategic vulnerability: value-added products represent only 15 percent of export volume but generate 40 percent of export revenue. The economics of shifting toward processed timber are compelling, even if the capital investment and technical requirements are substantial.
What the Industry Should Do Now
The period before the Section 232 investigation concludes is an opportunity, not a waiting period. Exporters supplying the US market should be confirming long-term supply agreements with American distributors, documenting the characteristics that justify continued exemption, and accelerating work on alternative market relationships. The tariff decision may preserve the status quo — or it may require rapid adjustment. Firms that have done the preparation will be in a better position either way.
