What the Latest Tariffs Mean for Furniture, Cabinets and the Supply Chains Behind Them
In the latest round of a long stream of tariffs being rolled out over the course of 2025, President Trump recently announced that a number of new items will now be subject to significant tariffs in an effort to bring more manufacturing back to the U.S. Effective October 14, tariffs will include a 10-percent rate on imported lumber and 25 percent on imported kitchen cabinets, bathroom vanities (and associated products) and upholstered furniture. However, as of January 1, 2026, the tariff rate on upholstered furniture will increase to 30 percent, with cabinet and vanity rates increasing to 50 percent.
While consumers will likely feel the greatest burden from these recent changes, global supply chains and the companies that keep them moving are scrambling to understand their options and minimize the impact. As a result, companies are assessing their warehousing, transportation and sourcing strategies to determine how to best position their businesses to respond.
Understanding the Short- and Long-Term Impacts
According to CNN, furniture prices in the U.S. have already increased recently due to tariffs on countries including China and Vietnam, which are the top two sources of imported furniture, with a combined $12 billion in exported furniture and fixtures in 2025. The new tariffs will be added to those already in effect, compounding the amount that companies must absorb or pass on to consumers. Low-cost upholstered furniture imported from Southeast Asian countries will likely see the most impact, creating some opportunity for manufacturers of higher-end goods made in the U.S. to gain additional business.
As companies look to mitigate risk and reassess their supply chains to minimize the disruption, a number of short- and long-term impacts should be considered:
- Cost increases and compressed margins: While companies work to absorb or pass along the cost increases to protect their margins, considerations around timing due to delays, bottlenecks and a likely pull-forward in demand should be communicated to customers ahead of the start date for the tariffs. Port congestion, backlogs in customs and compliance delays will all contribute to these timing setbacks.
- Alternative sourcing strategies: While companies will likely be considering negotiations with existing suppliers for cost sharing or reduced contract terms, many companies will also be considering their options around sourcing from other countries in order to reduce the amount they must pay in tariffs. Localized sourcing and nearshoring may also help to provide better options for reducing costs.
- Pressure on inventory and warehousing: Ahead of the start date for the new tariffs, companies will likely look to stockpile inventory at U.S.-based warehouses ahead of tariff start dates, reducing available capacity and likely resulting in increased rates.
- Anticipating demand and market reaction: As the tariffs go into effect, companies are likely to see lower demand for the affected goods since the bulk of the additional costs will likely be passed on to consumers. With rising costs, companies should expect fewer discretionary purchases by consumers, leading to lower product demand.
Flexibility Is Key
With so much uncertainty ahead of the tariff start date, the best way for companies to prepare is to create more flexibility within their supply chains. Below are a few ways to start:
- Diversify suppliers and implement multi-sourcing strategies instead of relying on one country or region. Diversification may help to reduce the burden and aid in contingency planning if and when backup suppliers are needed. For long-term protection, investing in domestic sourcing and capacity may also help to reduce risk exposure and create more predictable financial models and forecasts moving forward.
- Utilize technology and visibility tools to obtain better data for assessing costs and risk. Using the latest available data and ensuring complete visibility into a supply chain can help with accurate scenario planning and stress testing to better understand areas for improvement and risk management.
- Forge strong partnerships. Building alliances with domestic and nearshore manufacturers or making co-investments in regional facilities can help companies to build more stable, predictable supply chains…but diversification remains key, even as companies work to explore contract renegotiations, cost-sharing, etc.
- Audit product portfolios to understand risk. Assessing which product SKUs are impacted by tariffs and modeling the cost impact per SKU can help companies get a better understanding of margin sensitivity to understand exposure.
- Preload inventory ahead of effective dates where possible. With only a couple of short weeks to prepare for the new tariffs, companies should look to front-load as much inventory as possible to provide a buffer while they develop more long-term solutions. This includes evaluating warehousing capacity needs and working with providers to ensure flexibility can be provided to accommodate the pull-forward in inventory, as well as considering foreign-trade zone (FTZ) or customs-bonded warehousing space where available.
- Communicate clearly — upstream and downstream. To ensure suppliers can pivot quickly as needed, working closely together to alter strategies can help to ensure a smooth transition. Likewise, communicating downstream to retailers about any cost impacts or delays can help manage their expectations and those of end consumers.
With so much uncertainty plaguing today’s supply chains as it relates to tariffs, companies who focus on flexibility, diversification and risk management will be best positioned to handle issues as they arise.
If you have questions about how to prepare for the impending tariff changes, including transportation, warehousing or broader supply chain solution needs, reach out to our experts to learn how we can help you create a more flexible supply chain.
