The day after an election is typically a downshift. No matter how they feel about the outcome, most Americans welcome an end to the frantic, high-stress, high-noise energy of campaign season. But for the home industry, November 6 kicked off a new scramble: What to do—or not to do—about tariffs?
The subject has quickly become the hot topic du jour among industry brands. For some, tariffs evoke hope for a revival of American manufacturing; for others, dread of inflation and instability. But now that Donald Trump is officially president-elect once more, it’s clear that tariff policies will almost certainly be changing one way or another.
Trump is a mercurial figure, and it’s possible that when he takes office, his much-hyped tariffs will come in lower than expected, or include carve-outs that dull their impact on the home industry. However, unlike with cabinet appointments or tax reform, the president doesn’t need congressional approval to implement tariffs. What Trump decides goes. And the president-elect has been crystal clear about his enthusiasm for tariffs, at various points on the campaign trail floating the idea of imposing 60 to 100 percent increases on tariffs for all goods coming out of China, as well as a flat 10 to 20 percent levy on imports from the rest of the world. Almost any version of those tariffs would have a radical impact on the home world, a corner of the economy that relies heavily on the global supply chain.
“I think every business owner should prepare as though there will be tariffs,” says Meganne Wecker, CEO of the Chicago-area manufacturer and importer Skyline Furniture. Lee Mayer, founder and CEO of the Havenly house of brands—a roster that includes Interior Define, Burrow, St. Frank and The Citizenry—puts it more bluntly: “I think there’s virtually no world in which we don’t see an increase in tariffs from China.”
THE HISTORY
We’ve been here before. Early in 2018, halfway through his first term, Trump began rolling out an ambitious series of tariffs. At first, it started with solar panels and washing machines imported from China. Eventually it grew to encompass steel and aluminum from around the world. By September of that year, Trump had rolled out a tariff on $200 billion worth of Chinese goods—including a 25 percent markup on plenty of home goods.
Then, as now, there was ample warning of forthcoming tariffs from the administration. Even so, their depth and breadth caught many in the industry by surprise. “No one was expecting a 25 percent tariff on furniture and lighting,” says Suren Gopalakrishnan, an international sourcing expert and co-founder of MakersPalm, a company that helps brands and designers develop products and supply chains. “It was like the sourcing map changed overnight.”
Those tariffs had a profound effect on the home industry. Many companies moved production to Vietnam or Indonesia to escape them; Mexico was also a beneficiary. There were noteworthy design ramifications as well: Brass, for example, an expensive raw material, was often eliminated from lower- and mid-priced home goods as part of industry-wide cost-engineering measures. The tariffs were predicted to raise prices, and by most accounts they did—though companies mitigated the impact on consumers through a combination of shuffling supply chains around and sharing costs between factories and importers.
However, it’s difficult to understand their true impact, because the tariffs were soon followed by an event that was far more disruptive on the global supply chain: Covid-19. Any inflationary effect of the tariffs on the home industry was soon offset by the incredible surge in demand caused by the home boom. The sourcing challenges brands faced were eclipsed by the pandemic-crippled supply chain. “It all became part of the same phenomenon,” says Wecker.
Though the period was difficult for those who push pieces around on the global supply chessboard, it also made the network more nimble and resilient. There is a sense, coming into a new round of tariffs, that the industry is more prepared. “This time,” says Gopalakrishnan, “we’re ready.”
MAKING MOVES OR STANDING STILL
One of the biggest challenge home brands face at the moment is uncertainty. Trump officially takes the reins on January 20. Until then, many in the industry are trying to read the tea leaves. Does the nomination of controversial cabinet picks like Fox News host Pete Hegseth and former Rep. Matt Gaetz suggest a more unbridled approach to tariffs? Should an errant tweet from the president-elect push business leaders to take a meeting with a Latin American factory?
Understandably, some are choosing to hold tight until there are real numbers on the table. A recent article in Furniture Today seemed to sum up the views of the wait-and-see camp: “We haven’t taken any different actions yet because it’s too new,” said David Crimmins, vice president of sales at Flexsteel Industries.
The attitude toward tariffs can be something of a Rorschach test. There are categories of manufacturing—lighting components, for example—that are so firmly embedded in the Chinese manufacturing system that importers have very few options outside of the country. As a result, no matter what the Trump administration does, there’s no meaningful opportunity to change course.
Joshua Rutstein is a vice president at Chintaly Imports, a company that specializes in contemporary furniture, including extendable pieces with mechanisms that Chinese manufacturers excel at producing. Following the 2018 tariffs, Chintaly didn’t break with China. Instead, it moved to share the cost burden with its factories and customers, preserving its overall business without being forced to radically raise prices.
There may be another round of tariffs, but Rutstein is resisting the impulse to run to other manufacturing markets. “We’re not going to put cash in the contingent possibility that there’s a tariff in January—it’s too far out and too variable to put a lot of investment behind that,” he says. “We’ve had these manufacturing relationships for 20 [to] 30 years in some cases. We’ve been through the tariffs before and figured out how to navigate them and not lose our shirts. It’s a question of [saying to our manufacturing partners], ‘Look, you’ve got skin in the game, we’ve got skin in the game—let’s work this out.’ If you’re someone who’s been flirting with offshoring from China to another country, and then the political situation changes and you want to come back, they’re going to remember that.”
For others, the math is more complicated. Some furniture importers that declined to be named told BOH that they have been actively loading up on merchandise prior to the Lunar New Year, a Chinese holiday that will see manufacturing throughout the country shut down temporarily starting at the end of January. The goal, they say, is to bring in as much merchandise as possible before the hammer comes down.
Others are stocking up the warehouses at a more measured pace. “I have always believed that it’s better to have just-in-case inventory as opposed to just-in-time,” says Satya Tiwari, the CEO of Surya—now the parent company of Global Views, Mitchell Gold + Bob Williams and RST Brands. “Normally we’d have six or seven months of inventory on order, on the water or in production; now we’re taking an extra three months of cushion. We’re operating as if [tariffs] will happen. If they don’t, we’ll have some extra stock.”
Still other companies are slowly pulling out of China altogether. While many categories are difficult to extract from the country, the production quality of case goods and upholstery has been making rapid advances elsewhere. “Across [all of our brands], about 30 percent [of manufacturing] is in China,” says Mayer. “We’re definitely accelerating the move away, and hope to be out of China by June 2025.”
MADE IN THE USA
The whole point of tariffs, of course, is not just to create logistical complexities for furniture importers, but to bring manufacturing back to the U.S. In that, the 2018 tariffs—which President Joe Biden extended—present a muddled picture. A 25 percent hike on Chinese imports was enough to stir up plenty of agita, but in many cases, manufacturers, wholesalers and retailers absorbed the cost, reasoning that losing a little margin was preferable to recreating their supply chain from scratch. In other cases, Chinese factories simply opened up a new operation in Vietnam, skirting tariffs by the letter of the law, if not the spirit. A March 2024 report showed that U.S. manufacturing overall had been contracting for 16 months, the longest stretch since the 2008 recession.
But anecdotally, the 2018 tariffs did aid some U.S. furniture manufacturers, even if it’s tricky to disentangle the business benefits from the Covid boom. “[There] was a net positive impact with all of the reshoring activity that the first round of tariff programs initiated,” says Dax Allen, senior vice president of marketing and case goods at Sherrill Furniture, a company that manufactures upholstery—and a good percentage of its case goods assortment—domestically. “Our incoming orders increased. That picked up speed even more as Covid came out about 16 months after that.”
Wecker also saw a boost, doubling her headcount in the post-tariff period (however, like Allen, she says it’s difficult to definitively ascertain what growth was driven by the pandemic versus demand for domestic production). Though the American furniture manufacturing industry is still far diminished from its pre-globalization levels, the 2018 tariffs did make an impact on some producers.
A new round might have an even bigger one. At 25 percent, especially at the lower end, importers are likely to keep trying to make it work overseas. But additional double-digit increases—to say nothing of a triple-digit hike—could change the math entirely. “At 60 percent, domestic manufacturing is very attractive,” says Tiwari.
At the same time, the appetite for furniture made in America has gotten sharper for reasons beyond tariff-induced incentives. “There’s a demand for customization, faster lead times, not holding inventory, and a sustainability component,” says Wecker, who is planning to double her staff again in the coming years. “If [tariffs] end up pushing manufacturing all around the world, it will not all come back to the U.S. But I think we have an opportunity to take a piece of it.”
Yet there are also knock-on effects on domestic manufacturing. Though it’s possible to reshore the labor of making a sofa or chair, many raw materials—ranging from fabrics to components to hardwoods—are still largely sourced from overseas. If these materials are subject to tariffs, domestic manufacturers may have to raise prices alongside importers. “We have moved a lot of our materials here to the U.S.,” says Wecker. “But there are some things, like knit velvet, that are so difficult to source unless you’re going overseas.”
The skilled labor shortage is also a challenge. After a generation of workers were forced out (or never entered) the furniture manufacturing industry during the offshoring of the 1990s and 2000s, a talent gap emerged. (Tour an American furniture facility today and you’ll notice a distinct lack of 40-year-olds.) This limits not only overall production capacity, but also the kinds of things that can be made in the country.
“I’m a big fan of U.S. production, but there are limitations as to what you can do,” says Gopalakrishnan. “It’s more than cost—it’s like, some of our products just cannot be made. Labor-wise, the skill set is just not there to do it. It puts limitations on the design choices you can make.”
Of course, workers can be retrained and machines can be retooled. But a true manufacturing renaissance would take more than tariffs—it would take patience. “The move to take [manufacturing] out of the U.S. to China was a slow move. And now China has been doing it a long time, and they’re really good at it,” says Wecker. “If it is going to come back, it’s going to just take time—it could be a decade.”
THE INFLATION QUESTION
There are as many takes on tariffs as there are sofas at Furnitureland South. But even among the ardent supporters and the furious critics, there’s a general consensus that high tariffs will raise consumer (and designer) prices. The obvious expense is the tariff itself. Even split between factories, importers and retailers, there’s simply not an extra 60 percent of margin to be absorbed—consumers will end up paying at least some of the extra cost.
However, there are plenty of other considerations: Companies looking to move to another country to avoid tariffs will have to pay relocation costs. The cost of raw materials will rise. And while reshoring to the U.S. may come with advantages, it’s usually not cheap either—especially if there’s a surge in demand, the price of doing business domestically will go up. For backers of tariffs in general, and Trump’s tariffs in particular, the trade-offs are worth it, but there’s not a whole lot of disagreement that costs would rise. The National Retail Federation just released a report on potential tariffs estimating that customers would spend anywhere from an additional $8.5 to $13.1 billion on furniture.
“Our country has become very reliant on China pricing, and that level of manufacturing,” says Wecker. “There are other countries that have the labor prices to do it, but not any of the other key components. At the end of the day, it will likely raise prices in some capacity. It’s just a matter of how drastic.”
The burning question—aside from which tariffs truly materialize—is what more expensive furniture and decor would mean in the current climate. We’re already coming off of a difficult time for the broader home industry. Designers have generally weathered the storm, but inflation, rising construction costs and a confusing economic picture have certainly slowed down business for some. Will clients balk at yet another price hike?
“The last time we went through this, it was right before Covid and a big surge in demand,” one importer told BOH. “Now things are very different.”
Additional reporting by Caroline Bourque
