Stagnant home sales, rising use of composite materials, and trade policy uncertainty are extending a multiyear decline in US paper and forest product exports, reports New York's Journal of Commerce.

Industrial production of wood products fell 2.9 percent year on year in February 2026, while capacity utilization dropped 4.2 percent, according to the US Federal Reserve. Utilization has plunged 30 percent since 2017 as the sector struggles to survive.

Outbound containerized shipments of paper and forest products dropped 12 percent in 2025, PIERS data showed. Export volumes have fallen at a compound annual rate of 7.3 percent over five years, leaving shipments down nearly one-third from 2020 levels.

Producers including Canfor, Interfor, and West Fraser have closed sawmills amid weak pulp, paper, and lumber markets. Executives cited trade disputes, economic uncertainty, and historically low prices as drivers of reduced capacity and operating losses.

Freight forwarders said composite and engineered materials are displacing traditional hardwood in flooring, furniture, and construction. 'Hardwood is turning into a luxury product,' said Stephen Zambo, CEO of AGL Group, noting that margins no longer justify investment.

Regulatory pressures are adding to the decline. The American Forest & Paper Association warned that the European Union Deforestation Regulation, due to take effect at the end of 2026, poses compliance challenges for US exporters.

Reciprocal tariffs have shifted trade flows. China imposed 125 percent duties on US lumber, reducing direct shipments. Vietnam became the largest importer last year, accounting for 15.8 percent of exports, with much of the lumber processed and re-exported to China.