Week of March 7, 2025
As home furnishings retailers, staying informed about legislative and trade developments is crucial for navigating our industry’s evolving landscape. This week, several significant actions by the U.S. government have emerged, potentially influencing our industry now and in the future.
1. Implementation of New Tariffs on Imports from Canada, Mexico, and China
On March 4, 2025, President Donald Trump imposed new tariffs and trade developments affecting major U.S. trading partners:
- Canada and Mexico: A 25% tariff has been applied to all imported goods, with a lower rate of 10% specifically for Canadian energy products, including electricity, natural gas, and oil.
- China: A 10% tariff has been levied on all imported goods.
President Trump’s imposition of tariffs on countries like China, Mexico, and Canada is part of his strategy to encourage the return of manufacturing jobs to the United States. By making imported goods more expensive, these tariffs aim to incentivize companies to produce domestically, thereby revitalizing U.S. manufacturing sectors.
In response, the aluminum industry has seen efforts to revive domestic production. The Magnitude 7 Metals aluminum plant in Missouri, which had previously struggled due to high energy costs and competition from China, is now exploring reopening opportunities, partly due to the increased tariffs aimed at protecting U.S. industries.
However, the effectiveness of tariffs in achieving long-term manufacturing growth is debated. While some industries benefit from reduced competition, others face challenges such as increased production costs and supply chain disruptions. Critics argue that tariffs may lead to higher prices for consumers and strained relations with trading partners, potentially offsetting the intended benefits of reshoring manufacturing jobs.
Shannon Williams, CEO of HFA, told Fox Business, “NC used to be a thriving hub for furniture manufacturing, using hardwoods from Appalachia. Over time, US manufacturers have shifted to US assembly, I’ve spoken with the CEOs of the largest furniture manufacturers supplying the U.S., and none of them have communicated intent or plans to bring manufacturing or assembly back to the US, due to tariffs on raw materials, components, high labor costs, and a lack of employable workers.” Shannon went on to say, “Some manufacturers are planning on opening operations in Canada to avoid retaliatory tariffs and serve the Canadian customers once served by US operations. Others are planning on passing the costs of tariffs directly through to their customers. With hundreds of millions of manufacturing jobs in Asia, even shifting 30% of unemployed North Carolinians into manufacturing (of all kinds) would only fill less than 60k jobs. That’s less than .01% of the workforce needed. Automation is the only viable path to reshoring, yet few furniture companies are investing in it. There are concerns about what increased costs will do to consumer demand and how sustainable manufacturing can be will reduce demand. One way or another, U.S. consumers need to brace themselves for higher costs—through higher labor costs for US production, tariffs on raw materials, and, or price increases from products manufactured overseas.”
Why It Matters: The home furnishings industry relies heavily on imports for a variety of products, from raw materials to finished goods. The newly imposed tariffs are likely to increase the cost of these imports, leading to higher prices for retailers and, ultimately, consumers. This escalation in costs could result in reduced profit margins and potentially decreased demand if consumers are unwilling or unable to absorb higher prices. Additionally, retaliatory tariffs from these countries on U.S. exports could affect domestic manufacturers who rely on these markets, further disrupting supply chains and pricing structures.
UPDATE as of March 6: US President Donald Trump paused tariffs on a wide range of Mexican and Canadian imports, offering a major reprieve to two top trading partners. Trump said Thursday that goods covered by an existing three-way trade deal negotiated during his first term won’t face a 25% tariff until April 2 — that covers roughly 50% of imports from Mexico and some 36% of imports from Canada, according to the White House.
2. Proposed Legislation to Strengthen Trade Enforcement
On February 24, 2025, a bipartisan group of U.S. lawmakers introduced legislation and trade developments aimed at enhancing trade enforcement laws, particularly targeting unfair trade practices by countries like China. The proposed bill seeks to equip the U.S. Commerce Department with new tools to address issues such as the dumping of underpriced goods and industry subsidies. Notably, it also aims to counteract strategies where production is relocated to other countries to evade U.S. duties.
Why It Matters: The home furnishings industry has been significantly impacted by imported goods, with concerns about unfair pricing and market distortions. Strengthening trade developments and enforcement could lead to a more level playing field, benefiting domestic manufacturers and retailers by mitigating the influx of underpriced imports.
3. Phase-Out of Polystyrene Foam
As of February 2025, several U.S. states and territories have enacted bans on polystyrene foam, commonly used in packaging materials. States like California, New York, and New Jersey have implemented these bans to address environmental concerns associated with polystyrene foam waste.
Why It Matters: The phase-out of polystyrene foam necessitates a transition to alternative packaging materials. Retailers must adapt to these changes to comply with state regulations and meet consumer expectations for environmentally friendly practices. This shift may involve evaluating and sourcing sustainable packaging options, potentially impacting operational costs.
4. Ongoing Implementation of the STURDY Act
The Stop Tip-overs of Unstable, Risky Dressers on Youth (STURDY) Act continues to progress, aiming to establish mandatory safety standards to prevent furniture tip-over incidents. The Act mandates rigorous testing that simulates real-world use, including the weight of children up to 60 pounds. The American Home Furnishings Alliance (AHFA) and the HFA have expressed support for the Act, emphasizing the importance of safety in furniture design and manufacturing.
Why It Matters: Compliance with the STURDY Act ensures that products meet enhanced safety standards, reducing the risk of accidents and potential liabilities. Retailers must stay informed about these requirements to ensure that the products they sell adhere to the new regulations, thereby safeguarding their customers and maintaining trust.
Staying abreast of legislative and trade developments is essential for home furnishings retailers to navigate the complexities of compliance and competition effectively. The HFA remains committed to advocating for the interests of its members, providing timely updates, and offering resources to adapt to the evolving regulatory landscape. Retailers are encouraged to engage with the HFA and participate in upcoming webinars and events to stay informed and prepared for these changes.
