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 most recent 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. More importantly, he 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 prompted 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, elections, sanctions, shipping disruptions, energy prices, China, 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 its implications 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.
China will be front and centre at the renegotiations of the USMCA on trade despite not having a seat at the bargaining table. …With the USMCA now subject to annual reviews, the US is using the continuing trade talks to put pressure on Canada and Mexico to collaborate with its efforts to undercut China. Washington is alleging that China is exploiting loopholes in the USMCA to avoid US tariffs on its exports by using Mexico and Canada to gain back-door entry to the US market. But there is a difference between blatant customs fraud and legal shipments facilitated by third countries as part of global trade. The US, however, appears intent on blurring that distinction… providing Washington with a convenient pretext to fiddle with the USMCA’s rules of origin and compel more US content to the detriment of the two other signatories to the pact. [to access the full story a Globe and Mail subscription is required]
WASHINGTON — The Canadian government told the Trump administration new legislation combating forced labour in supply chains should shield Canada from new tariffs. In a written submission the Government of Canada said it “remains committed to working closely with the US to eradicate forced labour from global supply chains.” …Ottawa’s case was among more than 1,500 written submissions ahead of a hearing in Washington this week on the use of Section 301 of the Trade Act of 1974 to rebuild his global tariff wall. US Trade Representative Jamieson Greer launched a trade investigations into 60 countries, including Canada. Greer said Canada, Mexico, the UK and some other countries should be hit with 10% duties because they are not doing enough to enforce bans on forced labour. …Canada already had legislation intended to curb forced labour in supply chains. But the federal government tabled a bill last month to boost enforcement.
The Trump administration’s decision to forgo renewal of the United States-Mexico-Canada Agreement (USMCA) on the July 1 deadline has opened a new front in the ongoing trade war — and one with direct consequences for US homebuilders and the mortgage professionals who serve them. US Trade Representative Jamieson Greer confirmed on Wednesday that the three countries met virtually for the required joint review and that the US declined to extend the agreement in its current form. The USMCA remains in effect until 2036 but will now be subject to annual reviews that could force significant renegotiation of major sections of the treaty, a development that has rattled an already strained construction supply chain. …Canadian softwood lumber already carries a combined duty burden of 45%. That cost has steadily compressed builder margins even as new home demand remains sluggish and housing starts have declined every year since their 2021 peak.
SALT LAKE CITY — A group of unions, environmental and civic organizations, and local governments has filed a lawsuit challenging the planned restructuring of the U.S. Forest Service, which includes moving the agency’s headquarters to Salt Lake City and closing regional offices and research facilities. The plaintiffs are alleging that the reorganization would impair the Forest Service’s ability to manage national forests, and they are seeking a preliminary injunction to prevent the USDA administration from moving forward with its reorganization plan. …The lawsuit was filed by Democracy Forward on behalf of more than 30 groups, including the American Federation of Government Employees and American Federation of State, County and Municipal Employees, which represent the USDA employees that will be impacted by the reorganization. The lawsuit alleges that restructuring the Forest Service in this way will reduce the agency’s capacity to sustainably manage national forests and engage in fire response and prevention efforts.
Two new inspections into kraft pulp and paper mills in Washington have been opened, following ongoing investigations at the Nippon Dynawave mill where a tank failure killed 11 workers. The Washington State Department of Labor & Industries said investigations are going on at two other active paper mills in the state that use the same process, where caustic chemical compounds are used to help break down wood into pulp for paper product manufacturing. In the weeks following the implosion of a massive tank at the paper mill that spilled hundreds of thousands of gallons of chemicals – believed to be the deadliest industrial accident in state history – managers of similar operations have been dialing up their insurance brokers to find out how well they’re protected. One investigation is occurring at a mill run by Smurfit Westrock, also in Longview. The other, run by Port Townsend Paper Company, is in Port Townsend.
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.
In the second quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 61, down one point compared to the previous quarter. The RMI has remained in the low 60s consistently over the past year. Even with this slight decline from the previous quarter, remodeler sentiment remains the standout sector within the housing industry, outperforming both its single-family and multifamily counterparts. …However, ongoing economic uncertainty and current cost pressures due to inflation are causing project delays, especially for larger ones. In the latest RMI survey, 74% of remodelers reported that their suppliers have increased prices of materials since March due to higher fuel costs, with the average increase in materials prices over that span being 6.7%.
A new federal rule will tighten hazardous-air-pollutant standards for plywood and composite wood products plants, including dryers, presses, refiners and lumber kilns. The 
Officials at the U.S. Forest Service are proposing new management plans for eastern Oregon’s Blue Mountains that include potentially tripling the amount of logging across 5.5 million acres in the next decade. The Forest Service published a draft of proposed changes to the 35-year-old Blue Mountain Forest Plan last week. It would allow more logging, mining and grazing across four national forests spread across eastern Oregon, as well as parts of southeast Washington: the Malheur, Ochoco, Wallowa-Whitman and Umatilla National Forests. The public has until Sept. 30 to submit comments on the 350-page draft proposal. The draft plan … predicts everything from habitat conservation to forest carbon storage would improve over the long term if more logging is allowed because strategically logging and grazing parts of the forest would prevent wildfire, which officials characterize as the biggest threat to habitat and forest loss. Environmental advocates disagree with the framing.
OREGON — The federal government has released its long-awaited proposal to triple logging across three national forests in northeast Oregon and southeast Washington. But critics say the Trump administration’s effort to boost a flagging timber industry in the Blue Mountains could ultimately harm another key pillar of the local economy: Elk hunting. It could also push elk out of forests onto private land, where the animals could damage crops and other property, according to a regional manager with the Oregon Department of Fish and Wildlife. The federal government’s plans for the Blue Mountains, which were released in draft form Thursday, could shape logging, recreation and environmental protections across 4.9 million acres spanning the Malheur, Umatilla and Wallowa-Whitman national forests for the next 15 years. …And more roads are likely to mean fewer elk. …People can weigh in on the 
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.
The Gold Mountain fire in Ouray County, west of Pueblo, has now burned more than 32,000 acres, but firefighters were hoping to make progress Thursday before forecast hot weather begins this weekend. In the latest update from the fire incident management team, authorities said 984 people were working on the blaze, which is now 8% contained. Much of the focus remains on protecting any structures that might be threatened by the fire, which has closed areas to the public in the Grand Mesa, Uncompahgre and Gunnison national forests. Jeramy Dietz, operations section chief for the incident management team, said firefighters were pleased to be able to allow some people back into the area to see their homes on the southwest side of the fire. Now, a lot of the focus is on getting containment lines built to the north and east of the active fire.
Boise Fire Department officials asked the public to leave the popular Ridge to Rivers Trail System and the Bureau of Land Management issued a temporary closure of BLM-managed public lands and trails after a wildfire started in the Boise Foothills on Monday afternoon. Just after 2 p.m. Mountain time Monday, Boise Fire Department officials announced they were responding to a grass fire that started near the 1900 block of N. Claremont Drive. As Tuesday morning, the cause of the fire was unknown and under active investigation. The fire is burning in the Boise Foothills, about two miles northwest of Boise. …The U.S Wildland Fire Service – Great Basin is referring to the fire as the Claremont Fire. The fire has burned an estimated 2,500 acres as of Tuesday morning, the service reported. …According the press release, firefighters are also facing unique challenges within portions of the area’s Military Reserve.
