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.
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.
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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.
Russia’s timber exports to China, its largest overseas market, fell sharply in the first four months of 2026 as Beijing’s prolonged property downturn weighed on demand, adding to mounting pressure on an industry already struggling with sanctions, high borrowing costs and weak profitability. Exports of Russian sawn timber to China dropped 30% year on year to 2.6 million cubic meters in January-April, while export revenue declined 26% to $603.7 million, the Vedomosti business daily reported. …China accounted for roughly half of Russia’s sawn timber exports in 2025 after Europe closed its market following Moscow’s full-scale invasion of Ukraine. But weakening Chinese construction activity, rising logistics costs and a stronger ruble have eroded demand, leaving Russian producers with fewer alternative markets. Russia’s total sawn timber exports fell 32% year-on-year to around 4 million cubic meters in the January-April period. China imported 11.2 million cubic meters of Russian sawn timber in 2025.
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.
Join us for the 16th edition of this flagship event—the only conference of its kind this year offering such a comprehensive view of the Cellulose market, covering the entire value chain from upstream to downstream. CelCo started up the conference Investing in Cellulose in 2011. Since then, it has been running every year in London, in November, the first Monday of the London Pulp Week. Its objective is to gather the entire cellulose value chain: from specialty wood pulp and cotton linters pulp suppliers to all viscose, acetate, ether & MCC, nitrate, cellophane, tyrecord, sausage casings, and sponge applications, as well as final converters up to “Brand levels” (textile, hygiene, pharmaceutical, cigarette, automotive, food, construction industries, etc.). The one-day conference includes a full-day event with 8 speakers, a breakfast, formal lunch, coffee breaks, and a cocktail the previous evening. The event will be held on Monday, November 9, 2026, from 9:30 a.m. to 4:00 p.m. at the luxurious Waldorf Hotel near Covent Garden. …This event is organized by CelCo, a cellulose consulting company registered in Switzerland, led by Christian Chavassieu, and assisted by its partner, Numera Analytics.
A proposed change to England’s fire-safety guidance could make it much harder to use timber in load-bearing structures above 11 metres. The consultation on changes to Approved Document B, the fire-safety guidance used under the Building Regulations in England, closes on 1 July 2026. Under the draft text, load-bearing elements of structure in buildings with a storey more than 11 metres above ground level should be made from materials or products achieving at least class A2-s3,d2. Most structural timber and mass timber products do not normally meet this reaction-to-fire classification. The proposal would move the debate beyond external walls and cladding. It could affect the structural frame itself in a much wider group of mid-rise residential, commercial and mixed-use buildings. This matters because mass timber and CLT are increasingly used in projects where developers want faster construction and lower embodied carbon compared with concrete or steel.
AUSTRALIA — One of the country’s most senior forest scientists has warned Tasmanians that locking up native forests would not end the demand for timber, only shift that demand onto someone else, met by imports that carry higher environmental and emissions costs. That is 
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 
Nordic, Baltic and Austrian forest industry associations are calling for a realistic and enabling EU climate target for the land-use sector, warning that overly high expectations for forest carbon sinks could place unnecessary pressure on forestry and the bioeconomy. In a joint letter dated 24 June 2026, several European forest industry associations said the EU’s post-2030 climate framework should focus primarily on phasing out fossil emissions, while allowing the land-use sector to continue providing renewable raw materials and climate solutions. The associations argue that forests and the wider land-use sector provide sustainable biomass that can replace fossil-based or carbon-intensive products, materials and energy. They say this role is important for Europe’s transition towards a circular and climate-neutral bioeconomy.
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.
At least 12 people have died and 23 others are missing in a wildfire in southern Spain, Andalusia’s regional leader Juanma Moreno has said. Four of the victims may be British, Andalusia officials say. Hundreds of people are trying to contain the fire, which Moreno said appeared to have been caused by a downed power line. The flames then spread in a wooded area around Los Gallardos, Almería. A sustained heatwave with temperatures of around 40C (104F) has caused wildfires across Southern Europe this summer. …Antonio Sanz, Andalusia’s health and emergencies minister, said the fire had been complex and rapid and the majority or even all of the victims may have been foreign nationals. …The fire also led to road closures, while 1,000 residents were evacuated, according to emergency services. Spain’s Military Emergency Unit (UME) said it had deployed 220 soldiers and 70 vehicles to the Almería region to combat the blaze.
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