by Companies say they are ready to take on new business should demand increase for U.S.-made products
HIGH POINT — The threat of tariffs on furniture from China and other parts of the world has domestic producers in a potentially lucrative position heading into 2025 as customers seek alternatives to higher-priced imported product.
With the possibility of tariffs as high as 60% on China-made goods and 10% to 20% on product from other parts of Asia and even the Western hemisphere, sources report that retailers already are looking for domestic options that could be competitively priced amid the expanded tariffs.
To be sure, the increased tariffs are not in play yet. But once President-elect Trump takes office on Jan. 20, the process is expected to unfold in short order as part of his pledge to cut taxes and fund those tax cuts as required by law. Of biggest concern outside of China is a potential tariff on Vietnam, which has become a major bedroom producer following the imposition of antidumping duties on China dating back to early 2005.
Vietnam is estimated to have an overall 50% market share on wooden bedroom furniture exports to the U.S. It also has the largest dollar value of overall wood furniture exports to the U.S. estimated at more than $5 billion, or 37.2% of the total $13.5 billion in wood furniture shipments in 2023, according to Mann, Armistead & Epperson’s latest furniture import study. This was nearly three times the amount of wood furniture shipped from China during the same period.
According to the same study, China still had the overall largest share of furniture exports to the U.S. in 2023, estimated at $9.4 billion, or 28.8% of the total $32.4 billion in furniture shipped to the U.S. This was followed by Vietnam’s shipments, estimated at $8.6 billion, or 26.4% of the total, followed by Mexico at $3.3 billion, or 10% of the total, Canada at $2.2 billion or 6.7% and Italy at $1.3 billion or 4.1%. Indonesia’s $1.29 billion in shipments represented 4% of the total and Malaysia’s $1.1 billion was 3.3%.
That said, domestic resources including wood furniture producers said they are ready to step up to help fulfill any needed demand, although overall capacity on the wood side could fall way short as most wood furniture production has long resided in Asia and other parts of the world, with dozens of U.S. plants shuttered and tens of thousands of employees lost during the late 1990s and early 2000s. Today, there are far fewer and much smaller plants in the U.S. equipped to handle the task, especially when compared with the number and size of massive wood furniture production facilities in Vietnam and China not to mention Malaysia and Indonesia.
Case goods manufacturer Mavin said it has seen an increase in business this year and is expecting a boost next year, in part related to the tariff situation.
“We are positioning ourselves in anticipation of another nice increase in 2025,” said David Wallace, sales manager for the furniture division. “We believe it is coming and that we will be ready to handle it from a labor and capacity standpoint. We are putting that in place now.”
In addition to a line of solid wood bedroom and dining room furniture, the company produces solid wood home office and occasional furniture made with North American-grown species. In fact, proximity to its supply chain is a major advantage it said it has in getting the goods produced and out the door quickly.
“We have been talking with our sales team quite a bit about the fact that while we might be higher priced than some of those (imported) goods, we get everything we need to make our furniture within an hour of our factory,” Wallace said. “We have an extremely strong and stable supply chain and we have a vertical operation where we control almost all of it ourselves. We also have a big capacity because we have added on to our factory. So when we are talking to a dealer about possibly expanding or opening with us, we point out the fact that some of that import stuff is less money, but if you buy a bedroom from that guy, you have to buy it 20 deep and keep it in the warehouse and tie up money and flow it.”
“With us, you can put it on the floor and your investment is far less. The turns may look slower, but the dollars and profits will actually be bigger. Isn’t that what we are trying to do?”
Doug Bassett, president of case goods manufacturer Vaughan-Bassett Furniture, said his company is already starting to get inquiries including with one major customer placing orders well in advance of a typical ordering cycle following market. The same customer has reportedly been holding off on containers from Asia in response to a possible major price increase.
“We read that as because of the risk associated with import containers,” Bassett told Home News Now. “We think that is going to happen with more of our major customers going forward.”
He too said his company is ready for the additional business, given the amount of furniture it has in production and inventory, not to mention the available capacity in its production facilities in Galax, Virginia.
“Throw us in that briar patch,” he said, noting that any increase in demand harkens back to the beginning of Covid when demand also was high. “We carry a lot of inventory and are in stock on over 95% of our lineup. During Covid, we upped production by over 50% inside a two-year period. We have done this before where we responded to a surge in demand with both finished goods and inventory ready to go by upping production. That is something we can do by adding workers and by adding hours. The first thing you do is go back to overtime and instead of running 35 or 36 hours a week, you got back to running 45 hours. That bumps up production by 20% to 30% just by adding hours. Then you start adding people and you can bump it up even more.”
Gat Caperton, chief executive officer of wood furniture manufacturer Gat Creek, said the company’s expanded facility has doubled its overall capacity, thus helping it to fill demand as it arises. Like others, it also has seen some early interest from various customers of late.
“These are favorable winds for us,” he said, adding that some new buyers were visiting its showroom at the October market in light of the potential tariff situation.
“They were just looking to see who would potentially have domestic capacity, but we didn’t speak to anyone that was actively looking to move to secure domestic capacity,” he noted. “They were just trying to understand the marketplace, but there was very little action. We don’t know what’s going to happen. People are still in exploration mode — there hasn’t been any significant movement yet.”
Given the amount of upholstery that is imported into the U.S., domestic upholstery manufacturers also could stand to benefit. According to the same import study, upholstery, more than 40% of imported upholstery comes from China and just over 30% comes from Vietnam. From there it falls off significantly, with countries like Mexico, Italy, Canada and Cambodia shipping at rates below 10%.
Thus, with a greater number of domestic upholstery plants still in business, some production could shift back to the U.S.
Some domestic upholstery manufacturers say they too are prepared should demand increase in either the stationary or motion side of the business.
Alex Reeves, president of Craftmaster, said the company is ready to fill the void should demand for U.S.-made product increase.
“The reason why we manufacture here is for speed to market, that is everything,” he said, noting that lead times for stationary fabric upholstery are five to six weeks and six to eight weeks for leather. “You can’t get that faster from China or any other country than you can get it from here.”
Reeves said its custom capabilities are another major advantage, with a mix of more than 800 fabrics and 50 premium leathers.
“Not everybody wants a gray sofa,” he said, adding that the color and pattern variation allows it to provide varied looks in large or small quantities alike in some 1 million square feet of manufacturing and distribution in five facilities in North Carolina. “That is what our real strength is. We also provide a quality product at a good price. That is what we hang our hat on.”
G. Lipscomb, a lead investor in motion upholstery manufacturer New Albany, Mississippi-based Homestead Furniture, said that he has been getting inquiries about his company’s production capacity.
“We are looking at it very cautiously and do not want to overcommit,” he said. “We have a handful of very good customers now that we are happy to be doing business with.”
He also noted that it was interesting to see how many fabric companies said they have moved China production to Vietnam in a short amount of time. That said, Vietnam could face tariffs as well. In addition, Lipscomb notes, there are plenty of other things that are imported from Asia such as mechanisms and motors for reclining furniture that could also face tariffs.
The upholstery sector also imports a wide range of other raw materials ranging from legs to exposed wood frames that could also face tariffs and thus drive up costs even for domestic producers. The case goods side of the business also imports some heavy machinery and various components that also could face tariffs, such as decorative hardware and other parts such as drawer glides and hinges.
Availability of labor too is another challenge for U.S. manufacturers given the competition for workers both in and outside of manufacturing, although some have said they are in markets where they can recruit and train labor fairly quickly.
However, there are still unknowns including which countries would be impacted, when the tariffs would be implemented and how much time that gives companies to either shift or ramp up production.
“There is so much unknown at this time that it is really hard to speculate what’s going to happen,” said Todd Wanek, chief executive officer of Ashley Furniture. “A lot of people want assurances that everything is going to be OK, but I think it’s impossible for anyone to give assurances right now because there is so much that is unknown.”
However, he is optimistic that Ashley and the rest of the industry will pivot to serve the needs of a wide range of customers. Ashley, for one, has both domestic case goods and upholstery production, that includes wood production facilities in Wisconsin as well as upholstery production in Mississippi, Wisconsin, Pennsylvania, North Carolina and Texas.
“We are very proud of the fact that we have a massive U.S. infrastructure to be able to pivot on,” he said. “I believe that supply chains will adjust once we know what’s going to occur.”
Caperton, of Gat Creek, agreed that there are too many unknowns right now to predict any firm outcomes.
“We are all really curious about what’s coming up, and we are all focused to see what happens,” said Caperton, of Gat Creek. “I don’t think that much is different for us because we are still focused on investing in our domestic capacity and will continue to do so. We will see if we become more cost competitive, but we all worry at what cost.”
The cost, of course, could be in what consumers ultimately pay, whether for imports with added tariffs or domestic goods, many of which are more expensive than imports — and much more expensive at the high end.
“Tariffs are a blunt instrument that when you swing it around in big ways, it makes us all nervous,” Caperton added. “There are just a lot of ins and outs and no one wins really if bad things come to the overall economy.”
And how some individuals in the industry feel about it depends largely on their business model, noted Bassett, of Vaughan-Bassett. With upholstery in particular, there is more capacity available than on the wood side to shift things like stationary upholstery and motion furniture.
“Where your factory is has a lot to do with what your attitude is,” he said.
On that note, Wallace of Mavin offers a pretty bright assessment.
“We are domestic supplier, so these winds that seem like they may become prevailing winds do seem to benefit our business model pretty nicely,” he said. “And we think the things that we are doing with the product line are helping us sell furniture regardless of any external stimulus. But all of this together makes us pretty optimistic that we need to be ready to build more furniture next year than we built this year and we will have a really good year.”
