New tariffs on imported kitchen cabinets, vanities, lumber, timber, and certain upholstered furniture have officially come into effect in the United States. This is part of President Trump’s larger, continuing trade policy offensive which uses unilateral tariffs to protect U.S. manufacturers. These tariffs do put additional costs onto an already stressed housing market. The new measures reflect the administration’s commitment to imposing sector-specific tariffs, a strategy that has characterized Trump’s second term in office.
The newest round of tariffs puts a 25% tax on imported kitchen cabinets and bathroom vanities. This rate will increase to 50% beginning January 1st. Upholstered wooden furniture will face an increase in tariffs from 25% to 30%, unless new trade agreements are reached. The changes come as a new, 10% tariff has been imposed on softwood lumber coming from Canada. This brings the effective tariff on this product to well over 45%. Duties on wood products from the United Kingdom will be capped at 10%. At the same time, imports from the European Union and Japan will be limited to 15%.
Ikea, a major player in the furniture industry, expressed concern about the impact these tariffs will have on business operations. Predictably, the company called the new tariffs a “more difficult” business climate.
“The tariffs are impacting our business similarly to other companies, and we are closely monitoring the evolving situation,” – Ikea
Industry stakeholders have been ringing alarm bells that these tariffs will increase housing costs. As a consequence, many consumers are now deciding to delay their home improvement and building projects. Buddy Hughes, an industry analyst, noted,
“These new tariffs will create additional headwinds for an already challenged housing market by further raising construction and renovation costs.”
Cristina Fernández, another veteran of the field, drew attention to the challenge that escalating tariffs are posing to businesses.
“They can’t absorb 30% tariffs on top of other tariffs that are already in place,” – Cristina Fernández
Tariffs are taxes the U.S. government places on imported goods, usually in the form of a percentage of a product’s value. These import taxes are what companies pay the federal government to bring these goods into the country—usually paid by the importing companies. Trump has made the argument that these tariffs are needed to protect U.S. manufacturers. They’re national security too — according to him, anyway.
“They’ll have to pass through pricing, probably in the form of a double-digit price increase.”
The U.S. government applies tariffs as taxes on imported goods, typically charged as a percentage of a product’s value. These taxes are paid to the government by companies importing the goods. The rationale behind these tariffs stems from Trump’s assertion that they are necessary for the protection of U.S. manufacturers and national security.