FACT: Note to Commerce Secretary: No, Mr. Lutnick, ballistic missiles are not made of wood.

THE NUMBERS: U.S. Commerce Department, Sept. 29, 2025 – since wood is “critical” to production of munitions, missile defense, and “thermal-protection systems for nuclear reentry vehicles,” “national-security” tariffs of –

10% on lumber
25% on upholstered furniture
25% on kitchen cabinets
25% on bathroom vanities

WHAT THEY MEAN: 

Until recently the Commerce Department’s Bureau of Industry and Security took pride in a sort of austere, technocratic reputation: an elite group of 600 experts who spent their time tracking avionics and biotechnology innovation, coordinating export-control lists in the Wassenaar Arrangement or the Australia Group, and evaluating about 40,000 U.S. business applications for sensitive high-tech export licenses each year. Long hours, code-word clearance, cryptic tech jargon, that sort of thing, plus a touch-grass reminder from the mission statement: “A ‘reasonable person’ standard should be applied to all decisions: How would a ‘reasonable person’ decide this issue?”

Now, apparently, not so much. The Commerce Secretary, Mr. Lutnick, seems to have converted BIS into a kind of surrealist comedy troupe, whose job is to turn mundane things like whipped cream, pine boards, and bathroom vanities into hair-raising and expensive national security alarms.  In mid-August, for example, BIS declared condensed milk and cream to be “steel or aluminum derivative products.” Also perfume, balance beams, mosquito repellent, propane, and windshield-deicing fluid, and lots more things. As metal “derivatives,” under the Trump administration’s spring decrees, they are now “national security” goods subject to a 50% tariff.

One such pronouncement might be a weird anomaly. Two look like policy. Here’s their September 29 announcement about wood:

“The Secretary [i.e. Mr. Lutnick] found that wood products are used in critical functions of the Department of War [Defense], including building infrastructure for operational testing, housing and storage for personnel and materiel, transporting munitions, as an ingredient in munitions, and as a component in missile-defense systems and thermal-protection systems for nuclear-reentry vehicles.”

With this “finding” as foundation — your home workbench billets or IKEA purchase might be “weakening United States industrial resilience and placing national security and economic stability at risk” — come tariffs of 10% on lumber and 25% on upholstered furniture, kitchen cabinets, and bathroom vanities.

What? Most lumber used in the U.S. — about 35 billion of about 50 billion board feet a year — is grown here. It’s not scarce. The rest is mainly from Canada, with some more from Sweden, Chile, and a few other countries. So, no risk to America’s wood supply. Nor is wood critical either as an “ingredient” of munitions such as artillery shells, bullets, tank rounds, etc., or as a “component” of missile defense systems. As to “thermal-protection systems for nuclear re-entry vehicles,” old Poseidon missiles in the 1970s did use disposable Sitka spruce nose-cones for insulation during launch. Outfitting the fleet required about 50,000 board-feet of spruce — i.e., one millionth of annual U.S. wood needs. Newer missiles are said to mainly use a graphite composite. No worries there, either.

The main use of lumber is to build family homes. Per the National Association of Home Builders, a typical new house contains 15,000 board feet of wood valued at $18,000 to $40,000, or 7% of the median $428,000 construction cost. So the lumber tariff’s main effect will be to make home-building cost a bit more, probably adding one or two thousand dollars to home contracts next spring. As to why BIS also chose to tax kitchen cabinets, bathroom vanities and upholstered furniture, but not tables, desks, bookcases, or naked-wood chairs and church pews, perhaps they’ll explain at some point.

As deadpan comedy or performance art, “condensed milk is made of metal!” and “American lumber for American missiles!” aren’t bad, though probably best in small doses. As policy, though, they mean (a) you’ll pay more for groceries and furniture, and (b) specialized government tech experts who ought to be studying biotech labs and satellite factories, researching Russian and Chinese military procurement patterns, meeting with NATO members and Asia-Pacific allies on semiconductor trade, and making decisions a “reasonable person” would find sensible, are instead sifting through furniture tariff codes and writing up bizarre press releases. Either way, the joke seems mostly on you.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

BIS then:

For nostalgia buffs, a summary of BIS’ pre-2025 work, from their 2023 Annual Report.

… the apparently dated but still-posted BIS mission statement.

Some international venues: the Missile Technology Control Regime (missiles, guidance and targeting software, specialized skin-cladding, fuels, etc.); the Wassenaar Arrangement (dual-use goods and conventional weapons); the Nuclear Suppliers Group (radioactive ores and metals, transport technologies, reactors, etc.); and the Australia Group (chemical and biological weapons).

BIS now:

BIS’ surreal September decree, on lumber, munitions, nuclear re-entry vehicles, etc.

… and their similar August edition on condensed milk and cream, perfume, propane, balance beams, and so forth, with comment in the Wall Street Journal from PPI’s Ed Gresser.

From the commercial side:

The National Association of Homebuilders on lumber tariffs, home prices, and mill capacity.

And a note on ballistics:

Per note above, the Poseidon C-3 missiles of the 1970s and 1980s did use Sitka spruce nose-cones as insulation during launch. (The Smithsonian Institution’s Air and Space Museum has one. Here’s a picture, with purpose and dimensions.) Each required a bit less than 0.2 cubic meters of wood, which means the full 619-missile Poseidon fleet must have used about 119 cubic meters over 25 years. Converted to commercial-lumber jargon, that’s about 50,000 board-feet, the equivalent of (a) about 100 farmed spruce trees; (b) three house frames; or (c) one millionth of the 50 billion board feet Americans use each year. Modern Tridents are said to have replaced wood with a lighter graphite composite, though perhaps the spruce is still a second- or third-best option choice.

At a somewhat further remove, Thor missiles used an “ablative” coating (a flammable skin meant to burn or boil off in transit from space to atmosphere) derived from the artificial fiber Rayon, whose makers use wood pulp as a base. Modern missiles can use that or different ablatives with a petrochemical base. In any case, BIS’ September decree doesn’t cover wood pulp.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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FACT: U.S. public disapproves of Trump tariffs by about 63% to 35%.

THE NUMBERS: Trump administration tariffs on goods from –

WHAT THEY MEAN: 

A concise 73-word resolution from Senators Ron Wyden (D-Ore.), Rand Paul (R-Ky.), Chuck Schumer (D-N.Y.), Jeanne Shaheen (D-N.H.), Peter Welch (D-Vt.), and Elizabeth Warren (D-Mass.):

“Pursuant to section 202 of the National Emergencies Act (50 U.S.C. 1622), the national emergency declared on April 2, 2025, by the President in Executive Order 14257 (90 Fed. Reg. 15041) is terminated effective on the date of the enactment of this joint resolution.”

This resolution would repeal the Trump administration’s April decree imposing a worldwide 10% import tax, plus various country-by-country rates ranging from 15% to 40%. It’s up for a vote before the end of October. So are two more from Sens. Kaine (D-Va.), Paul, Wyden, and others, which would terminate a February administration tariff decree on Canadian-made goods and another from July on Brazilian products. A look at each, and their effects so far:

The decrees: The Trump administration has been trying since February to replace the Congressionally authorized “Harmonized Tariff Schedule” with a new one, but also to evade the Constitutional approach to changes in tariff rates — Congressional bills — through a series of decrees declaring states of “emergency” or “national security” need. The three at issue this month use a 1974 law, the “International Emergency Economic Powers Act,” meant for quick action in the outbreak of wars, pandemics, or similar events. They are:

1. Canada, February 1: The first decree — “Executive Order 14193” — claimed Canada is “failing to devote significant attention or resources, or cooperate with U.S. law enforcement” on drug trafficking (in particular fentanyl), and imposed 25% tariffs on Canadian-made and -grown goods. It has since been revised to cover just products not ‘compliant’ with the U.S.-Mexico-Canada Agreement. Per CBP’s data, northern-border drug trafficking is small: of the 21,100 pounds of fentanyl seized at borders and within the U.S. in 2024, only 49 pounds — about 0.2% — were “northern border” seizures. This includes some internal U.S. production in border states as well as international traffic. Canadian law enforcement, meanwhile, reports seizures of about 6.4 kilos (14 pounds) of fentanyl last year, so it’s possible more flows north from the U.S. to Canada than comes down.

2. Worldwide, April 2: The second, “Executive Order 141257,” declares the U.S. trade balance a ‘national emergency’ justifying the wholesale replacement of the Congressionally authorized tariff schedule with dozens of new rates set by country, plus a worldwide 10%. Overall, it has hiked U.S. tariff rates from last year’s 2.4% to about 18%. The U.S. has run a goods-trade “deficit” since 1975. Since then U.S. GDP has quadrupled (per BEA from $6 trillion to $24 trillion, in real 2017 dollars) and U.S. employment has doubled from 77 million to 160 million. As to whether this long deficit pattern is a problem, reasonable analysts disagree; it’s hard, though, to see a 50-year stretch enduring through booms, recessions, etc. as an “emergency.”

3. Brazil, July 30: This one, “Executive Order 14233,” revises the April 2 decree to put a 40% on most Brazilian goods (though with many exemptions), on top of the original 10%. So, a 50% total. Identical goods from next-door Venezuela get 15%. Entitled “Addressing Threats to the United States from the Government of Brazil”, this decree cites as “threats” overly intrusive online content moderation and the prosecution of ex-President Bolsonaro for attempting to overthrow Brazil’s 2022 presidential election. It probably isn’t controversial to note that Venezuelan speech policies and court procedures are pretty far below Brazilian standards.

Now to some real-world results:

1. Lost growth, higher inflation: In “macro” terms, yesterday’s IMF “World Economic Outlook” projections for the United States show the U.S. losing about a point of growth and gaining a point of inflation. More locally, here’s an Ohio sample — higher costs, higher prices — from the Cleveland Fed’s September Beige Book:

“Many manufacturers reported that tariffs had increased the costs of electronic components, tools, metals, and other raw materials, with multiple contacts noting a lack of domestic suppliers for some items. Retail contacts cited higher costs related to tariffs on vehicles, beef, and other commodities. One healthcare contact said tariffs had affected hospital drug pricing, pushing up the cost per unit of service. Some manufacturers and auto dealers reported passing along 100 percent of tariff increases to customers, while others said they were slowly raising prices in response to higher tariffs. … Several contacts in manufacturing and professional and business services reported waiting to see “how things settle” before increasing prices but anticipated doing so in the near term.”

2. Industrial contraction: The core goals of all this, according to U.S. Trade Representative Greer, are a higher manufacturing share of GDP and a lower trade deficit. Since the administration’s decrees began in February, manufacturing has dropped from 9.8% of GDP in 2024 to 9.4%. Automakers in particular have been hit hard, with the three Michigan-based U.S. producers losing about $6 billion. The trade balance has jumped up and down, but overall is $150 billion more in deficit than in 2024.

* Lost exports and tourism revenue: Tariffing Canadian products — concentrated in industrial supplies such as fertilizer, aluminum, energy, and lumber — is proving a good way to raise production costs for American manufacturers like the Cleveland Fed’s Ohioans, as well as farmers and building contractors. It’s also damaging the U.S. economy in less obvious ways.  For example, though the Canadian government isn’t retaliating, a lot of Canadians are doing so individually. The Cleveland Fed’s Boston cousins, in their own, September Beige Book, point to a sharp drop in Canadian tourist visits as a blow to the northern New England economy: Maine got 1.1 million Canadian visitors in the summer of 2024, and a third less —780,000 – this summer. Kentucky and California get similar unexpected shocks, with exports of bourbon and wines down by half this year, as Canadians seek out recognizably “American” things so as not to buy them.

The Census hasn’t yet published August trade data, so we don’t know what happened vis-à-vis Brazil that month. It’s likely, though, that the main cost increases come in agricultural products — particularly coffee and orange juice — and that lost exports will be most painful in Texas and Florida. Texas is the top exporter to Brazil at $11.6 billion; Florida is most Brazil-reliant, with Brazilian customers buying a fifth of Florida’s $11 billion in aerospace exports, half of its $2.4 billion in semiconductors, and a third of its $1.6 billion in agricultural chemicals.

* Unhappy public: The public reaction, based on polling, is pretty negative and (depending on the pollster) either steadily bad throughout or bad at the start and worse since. The Washington Post’s May survey, for example, reported 64% of Americans disapproving and 34% approving, and an identical 64/34 split in September. Fox News’ poll differs a bit, finding slightly less unhappiness early on, but a deteriorating trend over time towards a September finding like the Post’s: 53%-28% disapproval in March, 57%-28% disapproval in June, 63%-36% disapproval in September.

Last thought: The administration’s decrees this year have different targets and varying pretexts. Their effects are more uniform: unfounded claims of threat, real-world harm to U.S. industry and consumers, and unpopularity. In terminating them, the Senate can do some real-world good, but also fulfill a more basic, abstract, and important responsibility.

To state the obvious, when presidents — in the U.S. or anywhere else in the world — try to declare states of emergency and rule by decree, it’s a bad sign. The public is right to oppose it. And in the U.S. specifically, the Constitution unambiguously gives Congress authority over “Taxes, Duties, Imposts, and Excises.” An American president who wants a higher tariff rate should therefore ask Congress to pass a bill. If he or she tries to impose this tariff rate alone, Congress should stop him, as Sens. Wyden, Paul, Kaine, et. al. propose to do this month.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Law:

The relevant three decrees: Canada on February 1, worldwide on April 2, and Brazil on July 30.

Data:

IMF’s sunny October 2024 outlook.

… and the chilly October 2025 reprise.

Census Bureau trade data, with no October release due to the current “government shutdown.”

Around the country:

The Boston Fed’s September Beige Book notes falling Canadian tourism in northern New England.

And the Cleveland Fed’s September Beige Book has Ohio manufacturers, retail, and hospitals all facing higher costs and expecting prices to rise.

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