Tariffs on Chinese Imports Are Hurting the Furniture Industry

I don’t want to say “I told you so”...but the Trump administration’s tariffs on goods imported from China are taking their toll on the furniture industry, the WSJ reports.

• Furniture prices increased 2.3% from September 2018 to September 2019—the period in which a 10% tariff on furniture imported from China was bumped up to 25%.
• Tariffs knocked furniture retailers' quarterly earnings. Wayfair partially attributed its Q3 profit miss to volatility from tariff hikes. Overstock counted tariffs among the external forces that contributed to its 21% revenue decline in Q3.

One solution? Head south. Some retailers have picked up their China-based supply chains and plopped them in Vietnam, where there are no tariffs and manufacturing space aplenty. As a result, imports from Vietnam have increased 51%. Vietnam’s now the third-largest furniture supplier to the U.S.

Bottom line: The National Retail Federation cautioned in a June study that tariffs would add $4.6 billion to consumer spending on furniture. Unless negotiators in ongoing trade talks reach an agreement to roll back tariffs, higher prices could become the norm.