The Canadian Kitchen Cabinet Association expressed gratitude for the delay in tariff hikes on furniture, cabinets, and vanities by U.S. President Donald Trump. However, the industry continues to suffer from the existing duties. Trump imposed 25% tariffs in October and postponed an increase to 30% for upholstered furniture and 50% for cabinets and vanities set for January 1.
Luke Elias, the association’s vice-president, acknowledged the 50% relief but highlighted that the industry is still grappling with the impact of the 25% tariffs, stating that mitigating these challenges overnight is not feasible. Kitchen cabinet manufacturing in Canada is a significant $4.7 billion industry, with exports totaling around $600 million annually. These tariffs have compounded existing struggles stemming from a sluggish Canadian housing market.
Ralph Fehr, president of Manitoba-based Elias Woodwork, emphasized that the 25% tariffs are detrimental, and a 50% duty would have been catastrophic for his company, which employs over 400 people and exports 80% of its products to the U.S. Fehr underscored that the tariffs have eroded the profitability of his business, emphasizing the need for cost reductions and streamlining operations to weather the storm.
The industry has already witnessed layoffs following the implementation of Trump’s tariffs in October, according to Elias, who is not affiliated with Elias Woodwork. As the industry faces dire circumstances, there is a call for government intervention to address issues such as parts imports at below-market value, which adversely affect the American cabinet and furniture industry.
In preparation for the upcoming review of the trilateral trade agreement, CUSMA, the American Kitchen Cabinet Alliance is advocating for stricter rules-of-origin requirements to prevent the influx of cheap products into Canada or Mexico. Amidst tensions in the negotiations, there are concerns that the cabinet and furniture industry might be sidelined in favor of higher-profile tariff targets like steel and automotive sectors.
Elias stressed the importance of not overlooking the challenges faced by the cabinet and furniture industry, which comprises 3,500 companies and employs over 25,000 Canadians. Despite being integral to every household, this sector often goes unnoticed in trade discussions.