Cabinet dealers, interior designers, and remodeling contractors across the United States are anticipating that new tariffs on imported kitchen cabinets, bathroom vanities, and upholstered wooden furniture, which took effect recently, will not only create more business opportunities but also drive domestic production of these items. However, many small business owners in the home improvement sector are bracing for immediate challenges due to the import taxes. Clients with projects already planned may hesitate to pay increased costs for budget-friendly cabinets, while potential customers could delay kitchen and bathroom renovations until economic conditions stabilize.
Allison Harlow, an interior designer from Michigan and the owner of Curio Design Studio, expressed concern over the impact of pricing volatility on the remodeling industry. Harlow noted that clients might be deterred by headlines suggesting significant price hikes, such as "Kitchen cabinets will go up 50%," leading them to opt against engaging with her company. Despite stagnant sales in the existing home market influenced by high mortgage rates, a forecast from Harvard University's Joint Center for Housing Studies predicts that homeowner spending on renovations and maintenance will remain steady through mid-2026.
The tariffs were imposed following a proclamation signed by President Donald Trump on September 29, which cited national security and foreign trade practices as justifications. The import taxes on vanities and kitchen cabinets are particularly steep, set at 25% until the end of the year, escalating to a significant 50% beginning January 1. Other upholstered furniture items, such as chairs, seats, and sofas, are also affected, facing a 25% tariff that will rise to 30% next January. Additionally, a 10% import tax on softwood timber and lumber is now in place, significantly impacting sourcing from Canada, which supplies around 85% of U.S. softwood lumber imports.
Some countries, such as the U.K. and members of the European Union, have been granted more favorable treatment regarding the tariffs on furniture and cabinetry. Import tax rates are capped at 10% for the U.K. exports and 15% for wood products from the EU and Japan. The American Kitchen Cabinet Alliance and various trade groups have been active in lobbying for these tariffs to counter what they describe as an influx of inexpensive cabinets from countries including Vietnam, Malaysia, and China, especially as U.S. furniture manufacturing has largely moved offshore.
John Lovallo, an analyst at UBS bank, speculates that the tariffs could add approximately $280 to the average cost of building a single-family home. While this increase is not likely to derail large-scale projects, some business owners aim to absorb the added costs rather than pass them on to customers. John Dean, founder of Dean Cabinetry in Connecticut, acknowledged that while some suppliers are raising prices by about 10% to recover tariff costs, he does not plan to increase his pricing immediately. Dean pointed out that a remodel's high overall expense requires delicate pricing strategies to maintain demand.
Experts like Jason Miller, a supply chain management professor at Michigan State University, predict that the tariffs may lead to tighter selections from importers, prioritizing bestsellers and high-profit-margin products. This shift could result in less variety for consumers as importers become more discerning in their offerings. While the tariffs are meant to bolster domestic production, some cabinet manufacturers face difficulties due to their global supply chains. Josh Qian, co-founder of Linq Kitchen, highlighted that their use of plywood and melamine panels sourced from Asia and Europe complicates the situation, as domestic alternatives are largely unavailable. He argued that rather than protective, these tariffs tend to escalate overall supply chain costs.
Conversely, cabinet companies that do not rely on foreign products are hopeful for increased business. ACO Denver Custom Cabinetry, based in Denver, which utilizes local craftsmanship, is prepared for a potential surge in demand but is also wary of whether they could meet that demand if it materialized too quickly. Andrea Mulkey, president and co-founder of the company, pointed out that a sharp increase in interest for American-made cabinets could strain resources, similar to challenges experienced post-COVID when supply levels became strained.
In contrast to the broader concerns expressed by others in the industry, Harlow at Curio Design Studio, which sources its custom cabinets from Minnesota and Wisconsin, fears that the tariffs may negatively influence her customers' perceptions and decisions. She believes the prevailing narrative around rising kitchen cabinet prices will necessitate more strategic marketing efforts to assure potential clients of the specific pricing scenarios that will not affect her business model.
