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How will US trade policy impact global wood product markets? Keep up with the latest pricing and trade flow analysis to stay ahead of market-moving events. Learn more.
The threat of new tariffs on imports into the US, unveiled earlier this month, has reduced the number of orders for Brazilian softwood molding products by 15-20%, but the decline has been less severe than expected, indicating an underlying resilience in demand and limiting immediate downside pressure on prices.
The decline in Brazilian softwood molding sales to the US in early June 2026 followed the announcement of a potential new round of trade measures targeting Brazilian products, prompting some importers to scale-back their exposure while awaiting greater clarity on policy direction.
But continued order flow suggested that buyers were not withdrawing entirely, reflecting stable consumption fundamentals, some Brazil-based exporters said. Other foreign suppliers to the US molding market have ramped-up sales in hopes to replace any reduced volume in Brazilian shipments.
Producers in Chile and Mexico have already secured bookings for October-November shipments, while Brazilian mills continued to offer October availability. This has allowed Brazilian producers to capture opportunistic demand from buyers unwilling to delay purchases until the outcome of a US Section 301 investigations becomes clearer.
Still, the broader lumber market was in a “holding pattern” two weeks after the tariff announcement. Buyers and sellers alike were refraining from engaging in detailed pricing discussions or making strategic shifts until there was more certainty around the scope and timing of potential measures.
This cautious stance reflected a familiar dynamic in US trade policy, where the prospect of tariffs alone can disrupt buying behavior well before any formal implementation, many observers said.
Market participants noted parallels with the previous episode of trade tensions in 2025, when the Brazilian government responded by offering credit lines to support liquidity rather than direct subsidies to production or exports.
“[Subsidizing] is not how Brazil handles things,” one Brazilian industry source said, emphasizing the country’s preference for financial support mechanisms over direct intervention in market pricing.
Producers also expressed confidence that Brazilian leaders would prioritize diplomatic engagement if tensions were to escalate again. Market sources expected negotiations with Washington DC to play a central role in shaping the outcome, with the potential to ease or delay the introduction of more severe trade measures.
Brazilian President Luiz Inácio Lula da Silva was expected to meet US President Donald Trump at the imminent G7 summit, although market participants said that no immediate market effect was expected from the meeting itself.
Looking ahead, the direction of prices and trade flows will depend largely on whether the US moves forward with concrete tariff measures or maintains the current level of uncertainty.
A formal escalation could accelerate the diversion of orders to alternative suppliers and increase downward pressure on Brazilian exports, while any delay or de-escalation may support a stabilization in buying activity, exporters said.
For now, the market remains in wait-and-see mode, with participants balancing short-term risk management against relatively resilient underlying demand.
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