KUALA LUMPUR: Impending US tariffs on timber imports will have a significant impact on Malaysian exporters of the product, many of whom are already grappling with rising operational costs and weakening global demand.
The additional trade barrier is expected to erode profit margins, disrupt supply chains and diminish the competitiveness of Malaysian timber in the US market.
Industry players warn that the tariffs could accelerate business closures, as some companies have already begun scaling down operations in anticipation of the policy’s impact.
The Timber Exporters’ Association of Malaysia (TEAM)) treasurer Wong Kar Wai said some domestic timber exporters, particularly in Perak, have already exited the business.
“The US plans to implement a 25% tariff on all timber products. So, how are we going to penetrate that market?
“I have heard that many of our exporters have recently faced order cancellations from US buyers,“ he told SunBiz at the Export Furniture Exhibition 2025 held recently.
On March 1, US President Donald Trump signed an executive order directing an investigation into whether timber, lumber and related imports posed a threat to US national security.
The order tasks commerce secretary with assessing the risks of import dependency and issuing a report within 270 days after consulting key government agencies.
Timber and lumber are essential to US manufacturing, particularly in construction and other downstream industries.
Despite having sufficient timber resources and a softwood lumber industry capable of supplying 95% of domestic demand in 2024, the US has been a net importer of raw materials since 2016.
The executive order raises concerns that reliance on imports could weaken supply chain stability and create security vulnerabilities.
When asked to comment, Wong said exporters are now looking at other markets, but this will be challenging as many other countries already have their own import markets for many years.
When it comes to timber, Wong said, different regions demand different grades of wood.
Higher-grade timber, which comes from the best parts of a tree, is usually sent to markets in Europe and the US, where there is strong demand for premium-quality wood. Lower-grade timber is more commonly exported to countries in the Middle East, South Africa and India.
Wong said these markets rely on this type of wood for various uses that do not require top-quality material. This global distribution reflects how different regions have unique needs and preferences for timber, he added.
Wong noted that Malaysia and Indonesia are expected to feel the biggest impact from the market downturn, especially with the new tariff adding pressure on exporters.
To counter this, he said, there is hope that Asean countries can unite under Malaysia’s Asean chairmanship and cast a single vote to push back against these challenges. “Without regional cooperation, Malaysia alone may struggle to make a significant impact, given its relatively small market size.”
He reiterated that the situation has already forced some exporters to exit the market, with several companies shutting down due to declining demand and rising costs.
“The industry was already struggling after Covid-19, with freight charges increasing sharply, and now the tariff is making things even worse. Many suppliers have been unable to sustain operations, and the number of businesses closing down continues to grow, painting a bleak outlook for the sector,“ Wong said.
