New US tariffs on imports of kitchen cabinets, vanities, lumber, wood and some upholstered furniture have gone into effect.
Under proclamation signed by President Donald Trump last month, a 10% tariff on imports of softwood lumber and timber will go into effect Tuesday.
The 25% duty will also apply to imported kitchen cabinets and dressing tables (increasing to 50% from January 1), and the 25% duty on upholstered wooden furniture will increase to 30% unless new trade agreements are reached.
Trump cited the need to protect American manufacturers and national security concerns for the move, but some in the industry are concerned that tariffs could raise home costs and cause customers to delay home renovations.
Tariffs are taxes on imported goods, usually levied as a percentage of the item's cost and paid to the U.S. government by the companies shipping those products.
These firms can pass on some or all of the additional costs to their customers, which in this case are ordinary Americans and other American businesses.
The president's tariff policy became a key feature of his second term in the White House.
Trump previously imposed industry tariffs on steel, copper, aluminum, automobiles and their components.
An additional 10% global tariff on softwood lumber means that products from Canada – the world's second-largest producer and a major supplier to the US – now face a rate of more than 45%.
Most Canadian producers are already subject to US countervailing and anti-dumping duties of 35.16% as part of a decades-long dispute over the product between the two countries.
Under existing trade agreements with the US, duties on timber from the UK will not exceed 10%, and from the European Union and Japan – will not exceed 15%.
The White House says Trump's tariffs were imposed “to protect against threats” to US national security and to “strengthen manufacturing.”
However, the National Association of Home Builders said in a statement in late September that the new fees could lead to higher home costs.
“These new tariffs will create further headwinds on an already troubled housing market by further increasing construction and renovation costs,” said Chairman Buddy Hughes.
According to Telsey Advisory Group managing director and senior retail analyst Christina Fernandez, retailers will have no choice but to raise prices on imported goods.
Speaking to BBC's US partner CBS News last month, she said retailers would try not to raise prices too much ahead of the holiday season, but “they won't be able to accept 30% tariffs on top of other tariffs that are already in place.”
“They will have to go through pricing, likely in the form of double-digit price increases,” she added.
Last month, Swedish furniture giant Ikea said tariffs on furniture imports were making it “more difficult” to do business.
“Tariffs impact our business in the same way as other companies, and we are closely monitoring the situation as it develops,” the company said.
