16 From the General Manager As we move through the second half of 2025, global market dynamics continue to shift in ways that demand our attention and strategic foresight. The recent escalation of U.S. tariffs under President Trump has introduced new complexities into the global pulp and paper industry—an industry that, of course, exerts strong influence over our hardwood log sales and chip exports to Asia and Europe. The U.S. administration’s tariff policies have targeted imports from key trade partners, including China, Japan, Canada, and the EU. These measures have increased production costs for U.S. paper manufacturers, disrupted supply chains, and triggered retaliatory tariffs from affected countries. China, in particular, has responded with duties on U.S. goods, including pulp and paper products, reshaping trade flows and pricing strategies across Asia. For our customers, these developments carry varying degrees of exposure. Japanese buyers are relatively insulated from direct U.S. tariffs but are affected indirectly through global price volatility and supply chain adjustments. Japan’s pulp and paper sector remains stable, though cautious. Our current Japanese customers are exposed only through the broader economic impact and are not directly trading with the U.S. Chinese pulp producers, however, are more directly impacted. With tariffs increasing the cost of U.S. pulp imports, this could drive changes to their sourcing strategies. That said, our major Chinese customer currently has no direct exposure to the U.S. market. The price of fully bleached hardwood pulp remains a key barometer for our industry. Tariff-induced trade friction has led to margin compression and order delays for major pulp producers in both South America and China. Danny Knoesen
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