Kitchen cabinet companies hope new US tariffs pay off in the long run

By MAE ANDERSON AP Business Writer NEW YORK AP Cabinet dealers interior designers and remodeling contractors in the U S hope new tariffs on imported kitchen cabinets bathroom vanities and upholstered wooden furniture that kicked in Tuesday will create more business for them and eventually boost domestic production of those products But several small business owners in the home improvement industry say they expect specific short-term pains from the import taxes Clients with projects already on the books might balk at having to pay more for the budget-priced cabinets they selected Prospective customers may postpone kitchen and bathroom renovations until costs and the economic system seem more stable I think the volatility around pricing is damaging to the remodeling industry commented Allison Harlow an interior designer in Michigan whose company Curio Design Studio creates and builds custom bathrooms and kitchens The bulk people will hear the headline of Kitchen cabinets will go up and might just opt out of even reaching out to our company Despite high mortgage rates having depressed sales of existing homes in modern years a forecast of remodeling activity by Harvard University s Joint Center for Housing Studies predicts that homeowner spending on improvements and maintenance will remain steady into the middle of Josh Qian co-founder of Linq Kitchen a designer and maker of kitchen cabinets shows kitchens made in Vietnam at a show room in City of Industry Calif Friday Oct AP Photo Damian Dovarganes Imported kitchen cabinets from Vietnam are stacked up at Linq Kitchen s warehouse in City of Industry Calif Friday Oct AP Photo Damian Dovarganes Josh Qian co-founder of Linq Kitchen a designer and maker of kitchen cabinets shows his company s show room and warehouse in City of Industry Calif Friday Oct AP Photo Damian Dovarganes A truck stands outside a show room and warehouse belonging to Linq Kitchen a designer and maker of kitchen cabinets in City of Industry Calif Friday Oct AP Photo Damian Dovarganes Show Caption of Josh Qian co-founder of Linq Kitchen a designer and maker of kitchen cabinets shows kitchens made in Vietnam at a show room in City of Industry Calif Friday Oct AP Photo Damian Dovarganes Expand Trump calls cheap imports a national safety threat A proclamation that President Donald Trump signed on Sept cited national precaution and foreign arrangement practices as grounds for imposing the tariffs on certain finished wood products and product components Of them imported vanities and kitchen cabinets incurred the steepest tax rates until the end of the year and starting on New Year s Day Upholstered chairs seats and sofas also are subject to a worldwide tariff effective Tuesday with the rate scheduled to increase to on Jan In addition the presidential proclamation put a import tax on softwood timber and lumber which comes from evergreen trees like pine and cedars Related Articles US stocks slip as exchange tensions with China flare up again IMF upgrades US increase outlook as Trump s tariffs cause less disruption than expected Instagram says it s safeguarding teens by limiting them to PG- content How to shop for a mortgage without hurting your credit outcome JPMorgan to invest up to billion in US companies with crucial ties to national defense Softwoods often are used to make furniture and in wood frame construction Canada is the source of about of the softwood lumber the U S imports or nearly one-quarter of the national supply according to the National Association of Homebuilders Specific U S trading partners are receiving more favorable recovery when it comes to the furniture and cabinetry tariffs The tax on U K exports was capped at while the rate for wood products from the European Union and Japan was capped at The American Kitchen Cabinet Alliance and other commerce and advocacy groups lobbied for tariffs to help offset what they described as a flood of cheap cabinets from countries such as Vietnam Malaysia China and elsewhere in the decades since more U S furniture manufacturing moved offshore U S -made products tend to cost more but often are of better quality A higher bottom line for renovators on a budget John Lovallo an analyst at UBS bank estimates the tariffs on imported cabinets and vanities could add roughly to the average cost of building a single-family home not enough to sink a project that often carries an overall price tag more than times larger than that Various business owners say they plan to cover any tariff-related costs for now instead of raising customer prices John Dean founder of Dean Cabinetry in Connecticut sells cabinets that run the gamut from lower-priced imports to custom models made in his shop Imported products account for about a third of his sales but Dean mentioned he does not expect much fallout from the tariffs Two of his vendors that he buys imported cabinets from in China and Vietnam declared they would raise prices by to recoup selected of the duty costs Dean mentioned he would not charge customers more for now Since a kitchen remodel is a big ticket item to begin with and with the costs of building lumber and labor going up raising cabinet prices might hurt demand he explained My personal perspective is preponderance small- and medium-sized businesses are trying to absorb those costs he reported The wood product tariffs are likely to have a bigger effect on selection than on prices as importers scale back their orders to focus on bestsellers and products with the highest profit margins according to Jason Miller a supply chain management professor at Michigan State University It will make importers more selective in the varieties they bring in Miller mentioned So I think the bigger impact is going to be on the product variety side Consumers should expect less variety What cabinet companies are expecting Although the White House mentioned the tariffs were intended to boost domestic production and protect U S businesses from predatory contract practices specific cabinet makers say that will be laborious because their supply chains are multinational Linq Kitchen a Los Angeles-area company that designs builds and installs modern-style kitchen cabinets uses plywood and melamine panels from Asia and Europe in its projects co-founder Josh Qian announced A suitable domestic alternative does not exist he explained The kitchen cabinet industry is highly globalized and even U S -based manufacturers depend on imported materials hardware and finishes Qian explained These tariffs may sound protective but in reality they often raise costs across the entire supply chain At the same time cabinet companies that don t sell foreign products or rely on imported components look forward to capturing more business One is ACO Denver Custom Cabinetry in Denver Colorado which enlists Amish Mennonite and New German Baptist shops in the Midwest to handcraft custom cabinets Andrea Mulkey the company s president and co-founder explained her main concern is whether interest in American-made cabinets will grow too speedily It s hard to predict how much new business might come our way as competitors are affected Mulkey announced We only couldn t serve everyone if demand suddenly surged The real challenge is similar to what we saw post-COVID when everyone got busy at once and access to raw materials became strained The Curio Design Studio has its custom cabinets made in Minnesota and Wisconsin but Harlow worries about the tariffs costing her customers I think it will decrease consumer confidence and create a narrative that the work is going to get inherently more expensive Harlow revealed I think we will have to work harder to attract foreseen clients with messaging of how this blanket announcement Kitchen cabinets will go up does not impact our particular business model