Resource Development Council

Deep in the heart of Trump country — in Southeast Alaska’s logging camps — President Donald Trump’s trade war with China is causing anguish.

Twenty percent tariffs imposed by China on imports of Alaska spruce logs has caused Sealaska Timber Corp. to shut down half of its 2019 harvest operations, said Jaeleen Kookesh, vice president of Juneau-based Sealaska Corp., which owns Sealaska Timber Corp., the state’s largest forest products company.

Kookesh spoke before the Resource Development Council’s annual conference in Anchorage Nov. 20. RDC’s annual conference features presentations on a variety of Alaska industries that focus on natural resources including tourism, which depends on the preservation of the state’s natural beauty and wildlife

Kookesh said China’s action is part of a tit-for-tat series of tariff hikes imposed on U.S.-China trade where the U.S. hikes tariffs on Chinese imports and China reciprocated with tariffs on American products.

Sealaska Timber had plans to harvest “young growth” timber this year, or trees that have grown up in previously-logged areas, as part of the company’s transition from cutting in “old growth” forest lands to young growth, she said.

Forestry experts including those at Sealaska have urged the transition to young growth because Alaska’s original forests, which are important to sustaining habitat diversity for wildlife, could be endangered by harvesting that is too rapid.

Younger, second-growth trees in some previously logged areas are now mature enough for commercial harvesting and are an important part of enabling Sealaska to log its lands on a sustainable basis

“We’ve been working hard on the transition from old to young growth but now we’ve had to stop all of our young growth harvest because of the China tariffs,” she said. Meanwhile, the cutback in harvesting also threatens the economic viability of contractors in the Southeast region on which the industry depends, Kookesh said.

Alaska’s timber industry employs about 500, virtually all in Southeast Alaska.

Another iconic Alaska industry — seafood — is also feeling adverse impacts of trade fights, which have also embroiled seafood exports to Japan and Russia, which has stopped buying American fish even as the U.S. allows Russian seafood to be imported to the U.S.

An effort to get Japan’s tariffs on salmon roe, a key Alaska export, have now stalled, Glenn Reed, senior advisor to the Pacific Seafoods Processors Assoc., told the RDC. Russia has been off-limits for Alaska seafood since Russia invaded Ukraine, which prompted sanctions from the U.S.

“Russia continues to sell its products in the U.S., but we can’t have access to the Russian market,” Reed said.

Seafood companies are also feeling the indirect effects of the state’s fiscal challenges, which ripple through coastal communities where major seafood plants and fishing fleets operate. Last year Gov. Mike Dunleavy proposed an elimination of the 50-50 sharing of state fisheries business taxes with local governments where fish plants operate.

The reduction didn’t happen after legislators objected, but the attempt left community leaders concerned that the governor may propose it again. If the state cuts the local share to keep all of the fisheries tax municipalities will look to make it up somewhere, a new local tax on industries like seafood will likely result.

The financial margins are thin in many fisheries, which can be high in volumes but low in value, that even a seemingly minor tax of 1.5 percent could come close top wiping out profit margins.

Kookesh said the Trump administration is trying to help Alaska’s small timber industry, which is far smaller than it once was, with a proposed exemption from a “roadless” rule in national forests that prevents the U.S. Forest Service from building roads when it conducts timber sales.

In Alaska the policy has impaired the USFS’s ability to offer timber for sale in the Tongass National Forest in Southeast, the nation’s largest national forest, and Chugach National Forest in Southcentral Alaska.

Although the U.S. Department of Agriculture, parent of the forest service, has proposed s an exemption for Alaska, Kookesh warned that stiff opposition remains and that the final rulemaking will likely face lawsuits from conservation organizations.

However, even if the roadless rule were changed it wouldn’t have the effect of increasing timber harvests because the pace of logging is set out in forest management plans, Kookesh told the RDC.

The change would have the effect of allowing harvesting on an addition 185,000 acres in the Tongass but that really just gives the forest service more flexibility in selecting lands for logging when it does hold timber sales, she said. The cap on the allowable harvest in the management plan remains in place.

The proposed rule would also allow small communities and tribal groups to have a greater say on timber sales and where new roads would be built in the Tongass, she said.

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