Kelly McCloskey
Robert McKellar
Over the past two years, Tree Frog has periodically turned to political risk consultant Robert McKellar to help readers better understand the geopolitical forces increasingly shaping the business environment in which the North American forest sector operates. In his feature Trump’s Second Term and Political Risk in the Canadian Forest Sector, Robert explored how changing politics, government policy and international relations can create both risks and opportunities for forest companies. In doing so, he also introduced readers to the discipline of political risk management—a practical framework for anticipating and responding to an increasingly uncertain world.
Robert’s earlier articles generated thoughtful feedback and reinforced a common observation: the pace of global change is becoming increasingly difficult to follow. Every day seems to bring another headline about tariffs, trade disputes, wars, sanctions, shipping disruptions, energy prices, artificial intelligence, or some other geopolitical development. For many of us, the challenge is no longer keeping up with the news—it’s deciding what actually deserves our attention. Which developments are likely to influence markets, trade and investment in the forest sector? Which simply warrant monitoring? And which are little more than background noise? Those questions are central to political risk management. They are also questions we increasingly hear from readers trying to make sense of a relentless news cycle and what it means for their businesses and organizations.
In this article, Robert steps back from the daily headlines to explain how political risk professionals approach that challenge. His answer offers a practical framework for separating signal from noise—and a useful way of thinking about the global forces increasingly shaping the future of the forest sector.
President Trump will impose double-digit tariffs on imports from 60 countries over forced labor violations, US Trade Representative Greer announced. The action will cover 99.4% of US imports and apply to Washington’s top trading partners, according to a fact sheet released by his office. The tariffs are being brought under Section 301 of the Trade Act of 1974. …The new levies, which go into effect at midnight Friday, will replace tariffs that Trump imposed under Section 122 of the trade law earlier this year as they were set to expire. The tariffs are a part of an effort from the administration to push all the country’s trading partners to eliminate forced labor from the global supply chain. Ten percent tariffs will be implemented on countries that have made commitments to adopt and enforce forced labor import prohibitions, while countries that have not enacted a forced labor import prohibition will be hit with a 12.5 percent tariff.
The Trump administration is expected to formally declare on Wednesday that it will not extend the US-Mexico-Canada Agreement on trade, starting a decade-long clock to wind down the 32-year-old North American free trade zone. That declaration will kick off a six-year review session, part of a “sunset clause” negotiated by President Trump’s first administration. However, it will do little to alter contentious negotiations over the pact’s future, including sweeping demands to boost US content in automotive production and trade protections to block Chinese goods. …Trade chiefs from the US, Mexico and Canada are expected to meet virtually on Wednesday and declare whether they want to extend the pact for another 16 years. …Failure to reach agreement on revisions to USMCA would keep the trade pact in an indefinite limbo, with similar review sessions annually for the next 10 years. …The review and sunset process is separate from a termination clause that the US could exercise, triggering a withdrawal within six months.
The U.S. Department of Commerce 
The US will impose a 25% tariff on most imports from Brazil starting July 22, the U.S. Trade Representative’s office said on Wednesday — the first action under the Trump administration’s new tariff strategy that could eventually affect dozens of countries. …Wednesday’s announcement follows a proposal by the Trump administration in June to impose a punitive tariff of 25% on many imports from Brazil after deciding its practices were unfair on a range of issues from digital trade to illegal deforestation. The tariffs would apply to thousands of Brazilian imports, including sugar, agricultural machinery, apparel, electrical machinery, paper and steel. The U.S. said it would exempt all the products proposed for exemption in the June notice, except high-purity dissolving pulp and non-pharmaceutical applications of certain products. The exemptions include beef, coffee, rare earths, energy products, aircraft and aircraft parts.
GERMANY — Mercer Torgau announced strategic actions at its Torgau facility in Germany including an expected overall workforce reduction of approximately 350 positions. …Mercer Torgau has been impacted by ongoing uncertainty in the global economy as well as heightened raw material and energy costs. …These strategic actions involve initiatives to streamline Mercer Torgau’s organization and processes, along with adjustments to its product portfolio. Among other things, Mercer Torgau’s production capacity and workforce structure will be realigned with market conditions. An initial reduction of approximately 100 contractor positions is expected in July 2026, and Mercer Torgau expects an overall workforce reduction of approximately 350 positions. Strategic actions have commenced and are expected to be completed in stages, completing in or about the second quarter of 2027. …Mercer Torgau manufacturing focuses on lumber for construction and packaging, pallets, planed wood products, wood pellets and briquettes.
Cepi’s 
RUSS TAYLOR provided the latest quarterly report from the 
The US has formally declined to renew the USMCA trade agreement for a further 16 years. While existing tariff-free trade terms will continue, the decision triggers annual reviews until the agreement expires in 10 years. President Trump openly views the agreement as detrimental to US manufacturing, placing the burden of concessions firmly on Mexico and Canada. But as today’s chart shows, Canada has a much lower reliance on the US than Mexico, and the Carney administration is taking active steps to diversify its export base further. Exports from industrial sectors subject to tariffs – metals and auto – have fallen sharply, but the hit to activity is limited, as these account for just 2.5% of GDP. …Adjusted for a shrinking working-age population, production in these sectors has picked up. …Goods exports to the US make up close to one-third of Mexico’s GDP. Canada’s share is also high at 15%, but has fallen over time.
Softwood markets across Latin America and the Asia-Pacific are approaching a turning point, according to the latest market report from Global Wood Trends and O’Kelly Acumen. The report says some of the world’s lowest-cost plantation producers are increasingly linked to major importing markets where domestic supply growth is limited. “With harvests expected to decline in key exporting regions, China remaining structurally dependent on imports, and Japan nearing peak production, the regional supply balance is likely to tighten through 2035 – creating new risks and opportunities for producers, investors, traders, and wood consumers,” it says. The ‘Global Softwood Roundwood Supply – Latin America & Asia-Pacific’ report… says Latin America, Asia, and Oceania. Latin America remain a highly competitive source of softwood roundwood. Brazil, Chile, Argentina, and Uruguay account for nearly all regional softwood supply, supported by large-scale plantation forestry and investment by integrated forest-product companies and institutional owners. 
Japan’s housing starts surged 33.9% yoy in May 2026, sharply accelerating from a 11.4% increase in the previous month and marking the second straight month of expansion. It was also the fastest growth since March 2025, topping market expectations of 31.8%. Growth was broad-based across most segments, including owner-occupied homes (31.8% vs 19.5% in April), rental housing (33.3% vs 17.3%), built-for-sale housing (39.2% vs 3.4%), and two-by-four homes (24.8% vs 64.8%). In contrast, prefabricated housing fell 3.4%, swinging from a 11.1% increase in April.
IRELAND — Timber construction is moving from the margins of Irish residential development to its mainstream. An 
NEW Zealand — Increased trade is key to driving an innovative wood processing and manufacturing sector that will strengthen regional communities, reduce emissions, and build a more resilient and prosperous New Zealand, according to Mark Ross, Chief Executive of the Wood Processors and Manufacturers Association of New Zealand (WPMA). …“This includes supporting trade policies that open markets for high-value wood products, backing programmes such as the Value-Added Wood Exports Growth Accelerator, along with encouraging investment in domestic wood processing to grow the sector,” Mr Ross said. …The policy also highlights leading value-added wood and forestry trade missions into Asia and the Gulf region. The seven priority markets are Brazil, Switzerland, Argentina, Bangladesh, Nigeria, Uruguay and the European Free Trade Association (Iceland, Liechtenstein and Norway). …The Building the Future: New Zealand’s Next Billion Customers’ can be found 
AUSTRALIA — The completion of the 6-Star Green Star Design redevelopment marks the first mass-timber social housing project in New South Wales, and one of the state’s earliest Class 2 timber apartment buildings. Completed in April 2026, the redevelopment delivers 75 new social homes for 130 tenants across two eight-storey towers and a separate three-storey terrace. …Since the initial concept, the project underwent several development application amendments to accommodate the use of mass timber. …One of cross-laminated timber (CLT)’s greatest advantages is speed. At Glebe, the eight-storey apartment floor was erected in as little as two weeks, while the three storey-terraces were fully completed in just three weeks. More than 2500 cubic metres of CLT and glulam were used in the construction. …The integration of a traditional brick façade introduced a slower, labour-intensive layer that disrupted sequencing. …While Australia is not short on sustainable building ambitions, regulatory frameworks have not kept pace with mass timber construction.
SWITZERLAND — Forest trees can help contain heavy metals in polluted soils. But which tree species should be selected for this purpose? A study led by the Swiss Federal Research Institute for Forest, Snow and Landscape Research (WSL) investigated how seven different Central European tree species respond to metal-contaminated soils. All seven Central European tree species tested showed a similar ability to stabilise heavy metals in contaminated soil. Tree species with low nutrient needs keep excess metals out of their stems and foliage, making the production of uncontaminated timber possible. Selecting suitable tree species could bring abandoned land back into productive use while also safely confining the soil pollutants. …One promising solution is phytostabilisation— using plants to reduce the spread of pollutants into the environment. Trees are particularly well suited because of their long lifespans and extensive root systems.
Inter IKEA Group has intensified oversight of its Romanian timber supply chain, choosing to strengthen supplier verification processes instead of withdrawing from one of its most challenging sourcing markets. The move comes as allegations concerning timber harvested from old-growth forests continue to attract attention. Ulf Johansson, Head of Raw Materials at Inter IKEA Group, said stronger monitoring provides a more effective response than ending procurement from Romania altogether. …According to Johansson, every supplier’s sourcing plan is reviewed annually to verify where timber originates and how it has been obtained. The company requires all wood used in IKEA products to carry certification from the Forest Stewardship Council (FSC). Suppliers must also comply with the company’s mandatory IWAY MUST sourcing standard, which establishes requirements for responsible material procurement. …That position has been challenged by Greenpeace who published a report alleging that suppliers had harvested timber from forests with high biodiversity value.
With France and Spain struggling to contain raging wildfires, and others from Germany to Greece on high alert, Europe is discussing how to stop this happening again next year. …Addressing the root causes of wildfires, such as increasingly frequent heat waves, will require long-term policies. But there are ways to reduce the risk in the short term, said Tammouz Eñaut Helou, secretary-general of the French forest owners’ association UCFF. This includes raising awareness about how to prepare for outbreaks of fire and “maintaining access through forests to allow firefighters to operate more effectively during interventions”. …Environmentalists say it’s the entire structure of our forests that needs to be rethought. “The fires … are spreading through timber plantations. These monocultures are more than twice as likely to burn as natural forests,” the director of UK environmental group Earthsight, Samuel Lawson, said on Sunday. …Helou, representing the planters of such forests, disagrees.
NEW ZEALAND — With El Nio forecast to bring drier, windier conditions and elevated fire danger across many parts of New Zealand this summer, maintaining a strong level of readiness will be particularly important. A 
ITALY — The good news is that European forests continue to grow: according to the 2025–2026 Annual Report of the European Organisation of the Sawmill Industry (EOS), a body representing around 80 per cent of European sawn timber production, European forests now cover over 232 million hectares, equivalent to 35.4% of the continent’s land area, and over the last 35 years they have expanded by more than 23 million hectares, with an average increase of around 665,000 hectares each year. At the same time, Europe’s forest stock has reached 38.3 billion cubic metres, an increase of around 45% compared with 1990. Yet – and this is the less positive news – the availability of raw materials for the timber industry remains one of the main challenges to the sector’s competitiveness and to Europe’s sustainability objectives, as emerged from the Forestry-Timber General Assembly organised in Bologna by Filiera Legno (an association representing almost 600 companies in the timber industry). 
As the Victorian Forestry Transition Program comes to a close, some residents in regions that relied on the timber trade are questioning what has been done to build a replacement economy. The state government’s transition program ends today, two-and-a-half years after Victoria’s native logging industry was brought to an end with the flourish of a pen. The government committed $1.5 billion to support the transition, including $320 million to the Forestry Transition Program to provide financial support for affected workers, businesses and communities. But some residents remain unconvinced enough has been done to replace the jobs lost. …A Victorian auditor general’s 
The long-anticipated El Niño is here. …In its monthly update in June, the US National Oceanic and Atmospheric Administration (NOAA), issued an El Niño advisory, confirming that the warmer conditions had developed in the specific part of the Pacific Ocean known as Niño 3.4. In order to be considered an El Niño, temperatures need to be 0.5 C above the average. Ocean temperatures are now close to 2 C above average. …The strongest El Niño in recent years was the one in 2015-2016, where the ocean temperature anomaly was roughly 2.75 C. ….Nat Johnson, a meteorologist at NOAA’s geophysical fluid dynamics laboratory, said the transition from a La Niña to El Niño has been very quick. …Meanwhile, in Canada, the effects will be seen in the winter months, bringing milder temperatures, but also drier conditions, something that is of great concern for wildfire development in the spring in Western Canada.
Demand for biofuels has been growing in many parts of the world. …Disruption to oil exports via the Strait of Hormuz this year created a further incentive to switch to biofuels to ensure energy security. While biofuels can’t fully replace petroleum, they can be blended into gasoline and diesel, allowing countries to stretch existing fuel supplies. Many environmentalists contest the idea that biofuels are a sustainable alternative source of energy. And as more farmland is used to produce them, there’s less available to make food, increasing the risk of global food shortages and hunger in the poorest nations. …The priciest biofuel is sustainable aviation fuel, or SAF, which uses advanced refining processes to convert waste oils into jet fuel that can be blended for use in aircraft. There’s also so-called advanced or second-generation biodiesel, made from non-food sources such as crop waste, wood chips and even algae, which avoids competing with food crops.
LONDON — The United States accounted for about a third of the rise in global carbon emissions in 2025, as higher gas prices pushed power producers back to coal, an Energy Institute report showed. Highlights from the report include:
Western Europe has been scorched by its hottest June on record, scientists have said, as the UK enters its third heatwave of the year and wildfires ravage France and Spain. Inflamed by carbon pollution, the deadly June heatwave helped push surface air temperatures for the region 3.06C above their average from recent decades. Globally, June 2026 was 0.56C hotter than the 1991-2020 average and 1.39C hotter than preindustrial levels, making it the second-warmest June on record, the agency found. …Western Europe is facing its third heatwave in six weeks and widespread dryness is helping small wildfires explode into unchecked blazes. Copernicus said the succession of heatwaves illustrated “the growing challenge” posed by worsening heat extremes. Raging infernos have laid waste to large areas of southern Europe in recent days, prompting the EU to scramble firefighters and water-bearing planes to help national services overwhelmed by simultaneous blazes. 
The German government has approved a draft law designed to limit the support for electricity generation from woody biomass, aiming the meet the EU requirements. As a result, certain categories of wood will be excluded from subsidisation under Germany’s Renewable Energy Sources Act (EEG), such as saw logs, veneer logs, other industrial-grade roundwood and stumps and roots harvested from forests. Electricity generation from these types of wood, however, may still receive support if it is necessary to safeguard Germany’s energy security or if local industry is unable to use the forestry biomass in ways that deliver greater economic and environmental value than energy production. Under the proposed law, industrial wood residues will remain eligible for financing.
More than 300,000 people were evacuated and at least one person killed because of wildfires in France and Spain, with fire crews battling the blazes for several days. The two countries are facing massive wildfires that began last week amid successive heat waves in Europe that produced record high temperatures in several countries and led to thousands of excess deaths. …Fire crews were dealing with a 280-km perimeter of fire covering 77,000 hectares across Madrid, Ávila, and Toledo, Spain’s Secretary-General for Civil Protection and Emergencies Virginia Barcones told state broadcaster TVE. …In France, around 55,000 people were ordered to evacuate villages near Bordeaux… Much of Europe has been affected by successive heat waves that have raised the risk of wildfires. With temperatures expected to rise again and little rain forecast in many fire-affected areas, that danger is only expected to increase this week.
PARIS — A wildfire in southwest France grew so powerful that its smoke column became a thunderstorm, generating lightning that struck the ground and ignited new fires beyond the original blaze, French officials said. Put another way, that means the inferno was no longer simply being propelled by the weather. It was making its own. The thundercloud also produced violent, erratic winds capable of driving the flames in new directions. The phenomenon, called a pyrocumulonimbus, or pyroCb, is rare in Europe and more commonly documented in North America and Australia, where it occurs only over some of the most extreme fires. France’s national firefighters federation said it had never before recorded one in the country. …At about 6:20 p.m. Friday, two days after the fire began, the departmental fire and rescue service said it had generated a pyrocumulonimbus. The cloud weakened overnight as humidity rose, then formed again several times. An electrified black thundercloud…
BARCELONA, Spain — Firefighters in central Spain battled a wildfire on Wednesday that has burned over 32,000 hectares (79,000 acres) in one of the country’s largest blazes on record. The fire in rural Guadalajara comes less than two weeks after a deadly blaze devastated a small expat community in southern Spain. That small but extremely virulent fire killed 13 people, including several foreigners, in one of the southern European country’s deadliest wildfires. Spanish Prime Minister Pedro Sánchez on Wednesday visited the fire-ravaged area in Guadalajara, and called for a pact between political parties to fight climate change. “Year after year we clearly see how climate change kills and destroys wealth in our communities,” Sánchez said in the village of Tamajón, located less than two hours by car northeast of Madrid. “This isn’t politics. It is science, it’s about facts.”
Firefighting aircraft battled to contain a wildfire raging in a forest south of Paris for a second day on Monday, with the blaze forcing some residents from their homes as the region baked in a latest heatwave. French officials rushed two firefighting planes to the Paris region Sunday, after a fire erupted south of the French capital, disrupting traffic during a busy summer travel weekend and piling more misery on a region sweltering through its latest heatwave. The fire, which officials described as “very virulent” and of “exceptional scale”, began late afternoon in the sprawling Fontainebleau forest about 60 kilometres (40 miles) south-east of the capital, a onetime royal hunting preserve that today is dotted with quiet villages. It had raced across 800 hectares and was still spreading, officials said early Monday, causing the partial closure of the A6 highway, the country’s main north-south artery.
A wildfire burning out of control in southwestern France has forced the evacuation of 10,000 people from two dozen small towns and villages near the Spanish border and officials said strong winds on Monday would further fan the blaze. The European Union said on Monday it was sending four waterbombing aircraft to France from Cyprus and Sweden to help firefighters around the city of Perpignan. …The blaze has injured 16 people, including four firefighters, and scorched some 4,600 hectares in the foothills of the French Pyrenees. Early summer heat waves in France and across western Europe in May and June have scorched vast areas of land, making them particularly vulnerable to wildfires this year. The Trevillach blaze was burning near the third stage of the Tour de France, leading to its closure to the public on Monday to allow firefighters easy access to the area, according to Tour de France director Christian Prudhomme.
Hundreds of firefighters have been battling forest infernos in heatwave-scarred Europe, as temperatures are set to rise again on Sunday, local time. The latest wildfires have already devastated more than 17,000 hectares of land across France, Spain and Portugal where temperatures in some places are forecast to reach 40C. Authorities registered