Uncharted Territory: Hardwood Exports in a Chaotic World

2026 marks my 30th year in the hardwood industry. While I have witnessed several ups and downs over that period--from the growth of China and Vietnam to the great recession and COVID—I don’t believe any of us has seen anything like the perfect storm which has been threatening to swamp our industry in recent years. Production of hardwood lumber in 2025 fell to its lowest levels since the 1950s, and current estimates remain historically low.

As any Econ 101 student will tell you, declining supply is ultimately the result of declining demand. A combination of ever more sophisticated substitute materials, inflation, high interest rates, tariffs and trade tensions, sluggish GDP growth, a near-collapse of the Chinese housing sector, and simultaneous wars in Europe and the Middle East have conspired to restrict consumer demand in the US and around the globe. At the same time, new and costly regulations such as the EUDR and similar legislation under consideration in other markets like the UK, Japan, and Australia threaten to disrupt existing trade, independent of tariffs. These headwinds matter because nearly half of all grade US hardwood lumber production is exported.

U.S. HARDWOOD EXPORTS JANUARY-JUNE 2026

“Treading water” might be the best way to describe lumber export markets for the first half of the year. Hardwood lumber exports to the world totaled just over $841 million, a decline of just over 2% in volume and 3% in value compared to the same period in 2025. This represents the slowest January-June period since the Great Recession in 2010. Four major markets account for nearly 75% of all lumber exports—China, Canada, Vietnam, and Mexico. If the EU and the UK are thrown in, that market share tops 85% (Graph #1).

By contrast, log exports have grown rapidly over the past two years, and in the first half of this year, shipments spiked by an additional 50% to just over $675 million. On a volume basis, log exports totaled 1.27 million m3 while hardwood lumber totaled 1.29 million m3. On current trajectories, logs are set to surpass lumber by volume before the end of the year. In fact, through the first six months of the year, logs to Vietnam surpassed lumber to China as the largest (and fastest-growing) single hardwood product export market (Graph #2). Log shipments are concentrated in three major markets that together account for more than 90% of all US exports: Vietnam, China, and Canada. As noted above, those are also three of our largest lumber export markets, and with Vietnam and China both expanding sawmill capacity, there is fear that US lumber suppliers will increasingly compete with their own material. By the end of 2025, for example, Vietnam exported more American walnut lumber to China than the US did.

That is the topic for another discussion, however. It is important to point out that AHEC, as a recipient of US government funding, does NOT advocate for any domestic policy position on log exports. The USDA programs that fund our promotional budgets apply to all agricultural products. On the wood side, that includes logs and chips, as well as lumber, veneer, plywood, cooperage, and dimension/components. Rather, the focus of this article is to briefly recap the current state of hardwood exports as well as explore where our future markets may be.

CHINA

While China remains the largest single market for US hardwoods, accounting for just under 24% of all US hardwood lumber shipments, a closer look reveals some concerning data. Hardwood lumber exports peaked at just under 2.5 million m3 in 2018, right before the Trump administration fired the first shots of the trade war. Through the first half of 2026, that volume has declined to just under 675 m3. While the tariffs were certainly a catalyst, not all of the decline can be blamed on trade tension. In 2018, the US had a 30% market share in a $4.4 billion market. By the end of 2025, that figure fell to 19% market share in a $2.8 billion market. A significant slowdown in GDP growth, a collapsing housing market, an aging and declining population, and sluggish consumer spending have all contributed to this decline. Nevertheless, China remains an important destination for several US hardwood lumber species as the market absorbs nearly 40% of our red oak, walnut, and ash exports, as well as nearly 90% of all cherry lumber exports (Graph #3).

MEXICO

Mexico has long been one of the most important markets for US hardwood exports, remaining among the top four markets for nearly two decades. 2025 was not a banner year, however, as trade tensions and cross-border uncertainty dampened trade relations between the two nations. While US hardwood lumber exports are up nearly 7% by volume so far in 2026, Mexico’s hardwood imports from all regions are up nearly 11%. At the recent Mexican Timber Importers’ Association meeting, I had an interesting conversation with a large importer (whom I have personally known for more than 25 years), who said that the country is actively looking to replace US suppliers due to what they perceive as hostile trade actions by the US government. Indeed, Mexico’s imports of hardwood lumber from Malaysia and Brazil, and oak from France, all increased in 2025-2026. There is also concern about the future of the USMCA, which could have a significant impact on hardwood exports moving forward.

SOUTHEAST ASIA

By the end of 2025, Southeast Asia had surpassed China as the largest export market for US hardwoods. Singapore (+53%), Indonesia (+20%), Malaysia (+14%), and the Philippines all showed strong growth, more than offsetting the only market in the region to decline (Thailand). By far the largest market in the region—Vietnam — remained stable, with an increase of less than 1%; however, at more than $214 million in lumber imports from the US, it remains nearly double the next five markets combined. More worrisome is the fact that Vietnam’s hardwood log imports from the US increased 359% to $472 million as Chinese-owned sawmills are springing up across the country, competing directly with US sawmills that use our own resources. Indeed, Vietnam exported more sawn American walnut to China than the US did—effectively cutting us out of our highest value species in the world’s largest single market.

EU + UK

Despite the recent political tensions between the US and the EU, the impact on trade from tariff threats and the region’s slow economic growth, US hardwood exports to Europe in 2025 held up remarkably well overall. It was a mixed picture, with some markets continuing to decline while others performed better than expected. The US exported 327,000 m³ of hardwood lumber to Europe in 2025, with a total value of $230 m. Export quantity was 1% less than the previous year, while export value increased by 2%. The relative stability of U.S. hardwood exports to Europe in 2025, following a 6% gain in trade volume the year before, bucked a broader downturn in European hardwood lumber imports. US share of total EU27+UK imports of sawn hardwood from outside the region was 22.4% in 2025, up from 22.1% the previous year and 15% in 2019. U.S. hardwood exports to Europe were maintained despite trade tensions early in 2025.

2026 has been a different story, however. Exports to the EU—by far the largest European market for US hardwood lumber- are down nearly 18% through June, more than enough to offset smaller gains in Spain, Portugal, and Italy (Graph #4). Moreover, uncertainty about the impacts of the European Union Deforestation Regulation (EUDR), which is scheduled to take effect in January 2027, has added a dimension of uncertainty to the market.

JAPAN

One of the major bright spots in 2025 was Japan’s imports of American hardwoods, which increased nearly 33% from 2024’s admittedly lower levels as the yen stabilized and modest growth returned to the economy. Through the first half of 2026, many of those gains have been given back as exports fell by nearly 14% compared with the same period in 2025. Nevertheless, Japan has always “punched above its weight” and remains a high-unit-value market for US hardwoods, as Japanese manufacturers are willing to pay premiums for color sorts and custom-size runs. Importantly, Japanese design remains highly influential across the region, particularly in the timber specified for manufacturing in Northern Vietnam and Northern China, including the Chengdu and Dalian manufacturing clusters.

MIDDLE EAST

At the time of writing, the ongoing conflict across the Gulf and Levant makes any meaningful market update on the Middle East somewhat moot. Shipments of US hardwood products to the region are directly affected by the crisis, while demand is significantly down due to economic uncertainty. Through June of this year, exports to the region as a whole declined by 21%. Even if the conflict is brought to a swift conclusion, the regional (and global) economic impacts are likely to be felt for many months to come. In particular, much damage has been done to the safe and stable image of Dubai and the UAE, and this may never truly recover. Nonetheless, the North African markets remain largely unaffected (at least directly) by the conflict, as does Pakistan. In fact, the port of Karachi is leveraging its position just outside the Strait of Hormuz as a transshipment hub, and Pakistani-flagged vessels have been granted free passage through the strait to ports in the Arabian Gulf. One of the bright spots in the region has been Turkey, where US hardwood exports increased by 23% in the January-June 2026 period (Graph #5).

INDIA

Exports of American hardwood lumber to India reached a new record in 2025, rising year-on-year by 46% in volume and 37% in value to just under 16,000 cubic meters and USD $10 million. To give this some perspective, in 2016, just 1,751 cubic meters of U.S. hardwood lumber was shipped to India, with a total value of USD 1.13 million. The 2025 numbers mark increases of 814% and 783%, respectively, over the ten years since then. The majority of volume shipped last year consisted of oaks, with red oak at 4,758 cubic meters and white oak at 3,650 cubic meters. There were also significant volumes of hickory, ash, tulipwood, and maple shipped over the 12 months. For the first half of 2026, exports continued to expand by an additional 13% (Graph #6). Nevertheless, increasing trade tensions between the US and India—particularly over India’s economic ties with Iran—may derail this growth, as the Trump administration has threatened crippling tariffs on the country.

By Mike Snow, Executive Director, AHEC