The "Solid American Hardwood Tax Credit Act", introduced in the House of Representatives and the Senate at the beginning of June, has won bipartisan support from both Republicans and Democrats, and is the latest step by Congress to increase demand for timber produced in the USA.
The "Hardwood Tax Credit" bill was backed by Glenn Thompson, chairman of the Agriculture Subcommittee and a Republican representative from Pennsylvania, the most significant hardwood furniture manufacturing region in the USA, home to more than 80,000 *Amish people engaged in furniture making.
US homeowners could receive tax credits on purchases of flooring, panelling, joinery products, cabinets, windows and roof windows made from US hardwood (rather than cheap artificial substitutes), under the new bill submitted to the House of Representatives and the Senate. Drawing inspiration from US President Trump's executive order to "free the forests for timber production", Senator Cindy Hyde-Smith stressed that the Solid American Hardwood Tax Credit Act (S.1964) will allow taxpayers to include US-made hardwood products as qualifying home energy efficiency improvements under the Energy Efficient Home Improvement Credit.
"Mississippi's sawmills and the rural communities that depend on logging have been hit hard by the economic difficulties facing the industry," said Hyde-Smith. "This bill is designed to support the domestic hardwood processing industry and the jobs it creates, while making US-made hardwood products more affordable for households."
"Our aim: to use this law to preserve rural jobs and sawmill work, which are vital to the local economy and to national security supply chains, while at the same time promoting the use of environmentally friendly wood products instead of cheap synthetic substitutes made in China," Cindy Hyde-Smith stressed.
The aim of the law is to help curb non-wood products and hardwood substitute materials on the US market.
Imported materials – competitors to the growth of domestic timber production
According to Hyde-Smith, the US domestic hardwood sawn timber market has shrunk from 6.5 billion board feet (1,000 b.f. is 2.34 cubic metres) in the late 1990s to 2 billion feet today. This has happened thanks to "timber substitutes manufactured abroad (mainly in China) and sold on the US market, which may contain harmful chemicals and generate a larger carbon footprint than sustainably sourced US hardwood".
Under the bill, which has bipartisan support from those states that are home to the largest US hardwood timber producers, the Internal Revenue Code would be amended so that American hardwood products qualify for the energy efficiency tax credits for home repairs set out in Section 25C of the Internal Revenue Code. At the same time, the costs of implementing the bill will be offset by repealing an expensive additional tax credit created under the Inflation Reduction Act (IRA).
Demand for domestic hardwood timber has grown in the USA
The rise in US demand for domestic hardwood timber is linked to the fact that hardwood production volumes (including pulpwood and other forestry products) fell in 2023 to 5,543,898,700 board feet (b.f.). That is the lowest figure since 1960 and amounts to less than half of the 1999 peak (12,619,000,000 b.f.). Domestic US market demand was met by less than 56% of the total. That is a very long way from the corresponding figure in the late 1990s, when the US market consumed 86% of all hardwood production.
As the world's largest exporter of hardwood timber, the United States has offset the decline in domestic demand for hardwood timber by rapidly expanding its trade in roundwood and sawn timber on global markets, not only in China but also in India, the Near and Middle East, South-East Asia and Europe.
* The Amish are a group of Swiss and Alsatian origin Anabaptist Christian church congregations. Because the Amish maintain a certain separateness from surrounding population groups and share a common faith, some scholars have described them as an ethnoreligious group, combining features of an ethnic identity and a Christian denomination. Some of the Amish speak Pennsylvania Dutch, while the so-called "coastal Amish" use modern technology (including cars) and speak English. In 2024 the number of Amish exceeded 400,000, and their numbers are growing rapidly. Amish church groups seek to maintain a certain distance from the rest of society. They usually refer to people who are not Amish as "the English" and often describe outside influences as "worldly".