President Donald Trump announced on Friday his plans to impose tariffs on furniture later this year. This move adds to his existing tariffs on various products and commodities. In a post on his Truth Social platform, Trump mentioned that an investigation into imported furniture has been launched and is expected to conclude within the next 50 days.
“Upon completion, furniture coming from other countries into the United States will be subject to tariffs at a rate yet to be determined,” he said. He added that the goal is to bring the furniture industry back to states such as North Carolina, South Carolina, and Michigan. North Carolina is known as the Furniture Capital of the World, due to its access to hardwood from Appalachian forests.
U.S. companies based in North Carolina include Ashley Furniture, Century, Vanguard, and Lexington Home Brands. The pending tariffs align with the president’s effort to encourage domestic production and reduce reliance on foreign-made goods. The investigation targets furniture imports from various countries, primarily impacting key suppliers such as China and Vietnam, which together account for about 60% of U.S. furniture imports.
Most foreign goods are already subject to tariffs with a baseline of 10%. For furniture imported from Vietnam, the rate is 20%, with goods routed through Vietnam from third countries subject to 40%. In China, the current rate is 10% under a 90-day pause until November; this could increase to 30% afterward, following a threatened peak of 125%.
Tariffs planned to support local industry
Stocks of some furniture and home goods companies, including Wayfair, RH (formerly Restoration Hardware), and Williams-Sonoma, dropped significantly in after-hours trading following Trump’s announcement. Shares of Wayfair, which imports much of its furniture, and RH and Williams-Sonoma, which have been working to diversify their supply chains, tumbled.
Wayfair’s shares ended after-hours trading at $74.03, down 3.81% from their closing price of $77.84. Williams-Sonoma dropped $6.37 or 3.13% to $197.05, and RH fell $13.51 or 5.54% to $230.20. Conversely, U.S.-based La-Z Boy saw its share price rise by 2.08% to $37.34, up from $36.58 at the close of day trading on Friday.
New tariffs could lead to increased costs for these major furniture brands. However, for companies like Stickley, which manufactures most of its furniture in the U.S., shares rose on the news of the tariffs. The new tariffs come at a challenging time for the U.S. furniture industry.
Companies have experienced decreasing demand for over a year for items like new couches and dining sets. This decline is partly attributed to a slower housing market, as buyers wait for interest rates to decrease. With fewer new homes being purchased, there is less demand for new furniture.
Additionally, consumers have become more selective with their discretionary spending due to persistent inflation, impacting sectors like restaurants, new clothing, travel, and home decor. The specifics of whether the new sectoral tariffs on furniture would be added on top of existing country-specific tariff rates remain unclear.