by Challenging times require creative solutions that can benefit companies on both sides of the border
TORONTO — When the U.S. recently announced tariffs upwards of 50% on Canada, it had implications for both Canadian furniture producers and U.S. furniture producers.
For years, the two countries have been important export markets for each other, sending billions of finished goods across the border. For example, Canada was the top export market for U.S.-made furniture with nearly $1.5 billion in shipments, or about 60.5% of the total. It’s held that No. 1 spot for each of the past five years, according to recent figures from Mann Armistead & Epperson.
In turn, Canada has been one of the biggest shippers of furniture to the U.S. with nearly $1.7 billion in shipments last year, also according to Mann Armistead & Epperson. It has occupied the No. 4 slot for each of the past five years.
Obviously, tariffs of 50% would decimate the relationship with Canada, particularly in terms of shipments to the U.S. But it also could harm the relationship for U.S. producers as Canadians lean into their domestic resources, particularly for wood furniture, one of the main categories on the list of items subject to the tariffs.
That would be extremely unfortunate as retail customers and consumers in each country have come to value what their respective products represent in terms of quality, style and craftsmanship.
The question is, can the two industries maintain their long-term relationship of buying and selling furniture in spite of tariffs? That of course depends of whether they see opportunity to exist not just as competitors but as partners in trade.
It’s a solution that Bermex has found with its 2025 acquisition of wood furniture manufacturer Saloom in Winchendon, Massachusetts. By purchasing the company’s manufacturing assets and capacity, the Canadian wood producer has established a route to avoiding tariffs on much of its product, thereby protecting its business in the U.S. market, while also saving jobs in the U.S.
The strategy also potentially opens the door to sourcing more U.S.-made materials and components for its wood product line, thus avoiding tariffs on similar products shipped from Canada.
The situation is unique in that it was made possible through a well-timed acquisition for both companies. Bermex was seeking additional capacity while the owners of Bermex were looking to step away from the business. The purchase thus addressed two issues at once and provided Bermex a strategy to better serve the U.S. market should tariffs that were being discussed early last year become an issue. Steep tariffs were avoided then but have resurfaced with the Trump administration’s unwavering stance on trade that is affecting an industry that is caught in the crosshairs.
Obviously not every company is in acquisition mode or ready to sell as was the case with Bermex and Saloom. But we suspect in a slow market that we have seen of late, there may be some available capacity in U.S. plants producing wood furniture and even upholstery that faces a 25% rate under the Section 232 tariffs.
This begs the question on whether companies from each country can partner by sharing some of that capacity under a licensing or OEM use agreement that allows U.S. manufacturers to collect a fee based on the volume produced or sourced by Canadian partners. Obviously this could add to the cost of Canadian furniture, but it also could be well below a 50% rate being proposed by the U.S. government.
Canadian companies also could consider building operations in the U.S. although this could be a far more costly alternative than sharing capacity or even acquiring a U.S. brand. It also could be extremely difficult to obtain finishing permits as opposed to taking advantage of operations with existing permits.
In situations of shared capacity, companies also would likely need to reach agreements that keep competition between the partners in check, although this could be extremely complicated.
However, with specific styling and design attributes unique to each product line, there would likely be demand for both types of product regardless whether it is made in the U.S. or Canada. The appeal for Canadian companies is that their product could remain more competitively priced, particularly without a 50% tariff.
Another net gain? Such partnerships would likely preserve and perhaps even grow jobs in U.S. furniture manufacturing by filling available capacity. These OEM type of relationships happens all the time with domestic upholstery resources. For U.S. and Canadian manufacturers, this is something that would benefit large and smaller operations alike, including Amish workshops known for their quality, solid-wood furniture mix.
It’s too early to tell whether any of this would succeed. But if there’s a way for a company to minimize the impact of tariffs by acquiring a U.S. operation (also seen on the upholstery side through Man Wah’s purchase of Southern Motion in Mississippi), there also could be a way for both U.S. and Canadian companies to succeed through the sharing of capacity.
What we know already is that the two markets are too important to each other to be disrupted by tariffs or anything else that seeks to put up a roadblock that diminishes the value of global trade. Hopefully, the two countries can work out a solution that is mutually beneficial and that might also benefit retail customers over the short and long term.
