The Impact of New Tariffs on the Furniture Industry
As announced this week the Trump administration will move forward with the next round of tariff increases for good imported from China. Beginning September 24th about 5700 tariff classifications, including many that apply to furniture, will be hit with an additional 10% tariff through the end of the year. January 1st the same tariffs will increase from an additional 10% up to an additional 25%. The obvious impact will be much higher duty payments on those items imported from China but that impact could be amplified for the furniture industry.
Unlike most retail sectors where sales are strongest in the 4th quarter the furniture sector relies on strong sales in the 1st quarter of the year. While other retailers are stocking up during the Summer peak season when import rates are the highest, furniture importers are usually able to take advantage of lower freight rates after the traditional peak importing season is over. However, that may not be the case this year. The additional 15% duty that will apply to shipments arriving after January 1st will most likely cause high than expected demand in November and December as good that would have been imported in the pre Chinese New Year months of January and February are pulled forward to avoid the additional tax liability. Spot market container rates, which are already at some of the highest levels in years, will likely stay elevated based on the strong demand. Furniture importers will likely face the dilemma of paying high than expected freight rates or paying the additional 15% duty.
With Laufer's focus on the furniture industry we know this is not ideal news for many of our customers but we feel that it is important to share. If you would like to discuss the potential impacts on your shipping from now until the end of the year please do not hesitate to reach out to your local sales representative or firstname.lastname@example.org to schedule a conversation. We would also love to meet with you at the next High Point Market. Laufer is once again exhibiting as part of the Home Furnishings Association so please stop by our booth at Plaza Suites 1-527 #13.
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