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From Our President (cont.)

Scott Gies, Gies Timber and Land Inc.

practice and in response they have tightened their inspec- certain business methods and show more integrity. The container
tions of SYP logs (this also had an effect on the hardwood weight restriction by China makes it more expensive for both buy-
exporters in the North as well, but that is not our primary ers and exporters regardless of product as it will take more
concern). As many of you have heard me talk about this containers to move the same volume of product. We antici-
type of practice in SYP exports, it is yet again, in my opin- pate being able to offset some of this once we are
ion, another blemish on the SYP exporters credibility as a operational on our new site.
whole. Nonetheless, I believe this needed to happen so we
could improve our business practices as a whole. I just don't With regard to the tariffs and currency devaluation, I guess
like that we "left it up to the Chinese to tell us when to do the all we can say is, we are in it to win it! The bigger issue is
right thing" as an industry instead of doing it ourselves. the perceived risk of the tariffs in China and the unknown
affects it will have. Currently the LC
issuing companies are very
concerned about the financial risk
of U.S. products and have started
to make it harder for the Chinese
buyers to get LC's. Hopefully this
will settle down in the next few
months and cooler heads will pre-
vaitl. We will obviously do
everything in our power to work
with our buyers in China to insure
we keep moving logs, which might
include sharing in the cost of the
tariff's (if they go into effect).
While all of this might read as being
pretty dire, we still believe this is likely
only a short-term issue and we will con-
tinue to keep moving at the level we
have been. I think it's important to
assure everyone there will be no issues
Two weeks ago, President Trump's administration with log payments, but we will be managing log flow and prices
announced another $200 billion in tariffs against China. carefully until this blows over.
While these tariffs will likely not take effect until November,
or possibly later, they have had a negative effect on the In the meantime, we are investing in our future with a
market. Buyers are currently very nervous about U.S. logs completely new operation which will produce more volume
and prices have started to drop in the last two weeks. and have considerably more log storage. Please feel free to
There are several factors in play at the moment; China's contact me if you have any questions or concerns.
currency has been going down, inspections have become -- Donald Whitlock
more aggressive on SYP logs, 10% tariff threat by U.S. and
more recently China has decided to enforce their lower Managing Director Fiber International LLC
container weight limits for all imports. 139 Eastport Road Jacksonville, FL 32218

Of these issues there is only one we, as an industry, can control
and that is how we do business. Hopefully this heightened
enforcement by China will encourage SYP exporters to improve

Vol 29 Issue 3 2018 l SWPA Out of the Woods l swpa.ag l 6