Robert McKellar
Tree Frog:
A lot has changed in the six months since you wrote about political risk management in the Canadian forest products sector. In the media and thus the Tree Frog News, we’ve been hearing a lot about US lumber duties and tariffs and their potential impact on both sides of the border. But before we talk about that, can you comment on what’s changed from a political risk perspective?
Harmattan:
Back in August 2024, I pointed out that the sector had long enjoyed stability, largely because Canada’s primary market—the US—had been open, rational, and predictable. That sense of stability was rooted in a belief that even occasional trade disputes were manageable within a predictable framework. But as we noted then, political risk is not just about places, but also about periods, and things can change even in places we’re very used to. And yes, since that time, we’ve witnessed a dramatic evolution. …President Trump is now a critical variable in the fortunes of Canadian companies in the US, and indeed a major factor in the evolution of the international system. Getting a sense of the man and what he means is probably the most direct route to contextual insight for what follows. I’m not an expert on Trump or even US politics. But like most political risk consultants, I have been fascinated by his rise and character, and have kept an eye on the more discerning observations. What follows is a brief sketch.
China suspended on Tuesday the soybean import licences of three U.S. firms and halted imports of U.S. logs, stepping up its retaliation for Donald Trump’s decision to impose an extra 10% duty on China. …The suspension of U.S. logs was a direct response to Trump’s move on March 1 to order a trade investigation on imported lumber. Trump had earlier told reporters that he was thinking about imposing a 25% tariff rate on lumber and forest products. “The announcement of import restrictions on U.S lumber and soybeans linked with phytosanitary issues follows a long history of similar measures by Beijing,” said Even Pay, agriculture analyst at Trivium China. …China is one of the world’s largest importers of wood products and the third-largest destination for U.S. forest products. It imported around $850 million worth of logs and other rough wood products from the U.S. in 2024, according to Chinese customs data.
BEIJING – China suspended on Tuesday the soybean import licenses of three U.S. firms and halted imports of U.S. lumber, stepping up retaliatory action after the United States imposed additional tariffs on Chinese goods. Earlier in the day, China also imposed import levies covering $21 billion worth of U.S. agricultural and food products… Customs said it detected ergot and seed coating agent in imported U.S. soybeans while the suspension of U.S. lumber imports was due to the detection of small worms, aspergillus and other pests. …Beijing’s retaliatory measures were in response to U.S. President Donald Trump’s decision to impose an extra 10% duty on China, effective Tuesday, resulting in a cumulative 20% tariff in response to what the White House considers Chinese inaction over drug flows. …The suspension of U.S. lumber was a direct response to Trump’s move on March 1 to order a trade investigation on imported lumber. 
FRANKFURT – Bayer has told U.S. lawmakers it could stop selling Roundup weedkiller unless they can strengthen legal protection against product liability litigation, according to a financial analyst and a person close to the matter. Bayer has paid about $10 billion to settle disputed claims that Roundup, based on the herbicide glyphosate, causes cancer. About 67,000 further cases are pending for which the group has set aside $5.9 billion in legal provisions. The German company has said plaintiffs should not be able to take Bayer to court by invoking U.S. state rules given the federal U.S. Environmental Protection Agency has repeatedly labelled the product as safe to use, as have regulators in other parts of the world. “Without regulatory clarity (Bayer) will need to exit the business. Bayer have been clear with legislators and farmer groups on this,” analysts at brokerage Jefferies said in a note on Thursday, citing guidance Bayer’s leadership provided in a meeting.
Large, undisturbed forests are better for harboring biodiversity than fragmented landscapes, according to University of Michigan research. Ecologists agree that habitat loss and the fragmentation of forests reduces biodiversity in the remaining fragments. But ecologists don’t agree whether it’s better to focus on preserving many smaller, fragmented tracts of land or larger, continuous landscapes. The 
In wild Tasmania there are trees whose direct ancestors lived with dinosaurs. Many of those alive today are thousands of years old, and some have been growing for ten millennia or more. They are mostly hard to reach, hidden in forest valleys or on remote mountains, survivors of human greed and fire.
In 2006, Brazilian President Lula da Silva’s government passed the Public Forest Management Law, implementing a forest concession scheme designed to regulate and legalize logging activities in Brazil’s forest — in particular, the Amazon. Forest management consists of removing a small number of trees whose species are valued in the market. After that, the area can only be explored again in 30 to 40 years, following its regeneration cycle. Behind on its concessions targets, the current government wants to almost quadruple the current area of federal concessions by 2026. Even though it is different from deforestation, timber management has never been seen as a way to conserve the forest by traditional peoples.
The European Union Deforestation Regulation (EUDR) aims to prevent deforestation-linked products from entering the EU market. This study assesses the potential impacts of the EUDR on global forest product markets using the FOrest Resource Outlook Model (FOROM). We simulate two scenarios: the baseline EUDR, focused on commodity-driven deforestation and urbanization, and an extended EUDR+ scenario, which includes shifting agriculture. The results indicate that high-deforestation countries, such as Brazil, Indonesia, and Malaysia, are expected to face significant reductions in roundwood production and exports, with downstream effects on sawnwood and panel prices. In contrast, low-deforestation countries like Canada and the United States may experience slight increases in production to meet EU demand, but their impact is limited by moderate deforestation rates. The study also highlights the potential for market leakage, where deforestation-linked products may shift to non-EU markets, potentially undermining global environmental goals. 
Polarization is gripping the country and the centre isn’t holding, Environment and Climate Change Canada found when setting the country’s latest emissions reduction target. The department solicited feedback… to determine what Canada’s internationally binding 2035 pollution reduction obligations should be. …The results found that overcoming polarization is a major hurdle to implementing aggressive emissions reductions that climate scientists say is required to avoid catastrophic warming. About two-thirds of Canadians who participated support stronger measures to address climate change. “There was little middle ground, and very few people were satisfied with the status quo,” according to the findings. …When asked if the federal government is doing enough to fight climate change, 47% believe Canada needs to do more, compared to 36% that feel existing measures go too far. …Polarization is gripping the country and the centre isn’t holding, Environment and Climate Change Canada found when setting the country’s latest emissions reduction target.
Sweden might fail to meet its and the EU’s carbon neutrality targets after recent environmental policy shifts, the Organisation for Economic Cooperation and Development (OECD) warned in a report published Wednesday. Long considered a champion in environmental protection and the fight against climate change, the Scandinavian country has set a goal of net zero emissions by 2045, five years ahead of the European Union’s target. But Sweden might not be able meet either of those goals, according to a review conducted by the OECD, a 38-member group of mostly developed nations. “Over the last decade, the country has cut its greenhouse gas emissions faster than the EU average,” the report said. “However, recent policy shifts, particularly in the transport sector, have put into question Sweden’s ability to meet EU and domestic climate targets.” …In January, the World Wildlife Fund (WWF) criticised Sweden for not adequately protecting primary and old-growth forests from logging.
Denmark has long been praised for its transition to renewable energy, with renewable energy use rising from 6% in 1990 to 42.8% in 2022. However, behind this achievement lies an overdependence on woody biomass, which now accounts for up to 68% of its total renewable energy use. This growth has been sustained through direct and indirect subsidies, often exceeding those allocated to wind and solar energy. Denmark’s dependence on woody biomass is largely fuelled by imports from Estonia and Latvia. The country ranks among the largest, if not the largest, importer of woody biomass from the Baltic region, with 52% of its wood chips and pellets coming from these two nations. …Intensive logging is also devastating Estonian and Latvian bird populations. 
LONDON, March 12 – British energy regulator Ofgem said on Wednesday that it had not found evidence of a breach of sustainability obligations by power company Drax, in the watchdog’s review of reports prepared by auditor KPMG. Renewable power generators in Britain can receive renewable obligation (RO) certificates which can then be sold to energy suppliers who use them to sell renewable electricity products to customers. For biomass power plants to qualify for the certificates they must show at least 70% of their biomass fuel comes from sustainable sources. Green groups have long criticised the sustainability credentials of biomass power plants, which burn wood pellets to generate electricity. In 2023, regulator Ofgem opened an investigation into whether Drax was in breach of annual reporting requirements under the RO scheme. Ofgem said it reviewed over 3,000 documents and did not find evidence to support claims that sustainability obligations had been breached.
The harvesting and burning of forest biomass to produce energy continues to surge, according to a new report entitled 
Authorities in Japan have warned that the country’s biggest wildfire in decades is likely to spread, after it damaged dozens of homes and forced more than 1,000 people to flee. Fires continued to rage a week after they broke out in the city of Ofunato, on the north-east coast, with weather officials speculating that this year’s unusually dry winter and strong winds were to blame. As of Monday, the fire had spread through about 2,100 hectares of land, damaged 84 homes and forced 1,200 residents to take refuge in school gymnasiums and other shelters. A further 2,000 are staying with friends or relatives. …More than 2,000 self-defence force [SDF] troops and firefighters have struggled to control the flames as they spread through heavily forested mountainous areas bordering Ofunato, which was among communities destroyed in the March 2011 earthquake and tsunami.
MORIOKA, JAPAN — One person has died, and more than 80 homes appear to have burned down after a wildfire broke out in a northeastern Japan city, local authorities said Thursday, as the region faced its third fire in about a week. Since Wednesday, the blaze has scorched more than 600 hectares in Ofunato, Iwate Prefecture, the municipal government said. With the fire still spreading, about 3,300 residents have been ordered to evacuate. Firefighters battled the blaze through the night, while helicopters were deployed in the morning to contain it from the air. The Fire and Disaster Management Agency requested emergency support from firefighting departments in eight nearby prefectures, and they sent about 690 personnel combined. …Efforts to contain the blaze Wednesday were carried out at ground level as the strong winds precluded waterbombing by helicopters. When the latest fire broke out, strong wind and dry air warnings were in place in the area.