by With the race for president now behind us, the country as well as the home furnishings sector has been speculating about what changes a Trump administration may bring.
Based on his own comments during his campaign, Trump has promised to end the war in Ukraine, shut down the border, end the Green New Deal, repeal the electric vehicle mandate, return manufacturing to the United States and last, but certainly not least, impose tariffs.
Home News Now spoke to a number of industry veterans to get their best guesses on how the Trump administration might impact the economy and our sector. What follows are some of their comments.
Tom Erdman, HL Home Furnishings:
“It’s hard to say at this point. But my worry is that we’re going to get into an inflationary period because of tariffs. My concern is that assuming we throw up those tariffs, what retaliation might we get from the other side.
“In 2018, the Chinese stopped buying their soybeans from us during a tit-for-tat trade war and as someone who grew up in a farm state, it hurt the farmers. When Trump imposed tariffs on furniture, we were all trying to hold prices as much as possible. Also, we were using lower-than-normal freight rates at that time to help defray costs. I am seeing tariffs of 10% to 20% on the world and 60% on China.
“I am not against tariffs. I think that can be a way to level the playing field. My hope is that he would apply them evenly. We are keeping an eye on Social Security, and imported goods don’t pay for that, so this might be a way to get some of that back.
“Trump has also talked about bringing manufacturing back, but I think our infrastructure is pretty much gone. Maybe the answer is to have parts shipped over here and possibly looking at assembly functions, sort of like the automobile companies do.”
Joe Savovic, president and CEO, Soundstage USA:
“I’m looking forward to lower mortgage rates, which I think will spur the furniture industry. Generally, the furniture market follows the housing sector by 12 to 18 months, and I think that even with some lower interest rates, we won’t flip the switch overnight.
“I think that regardless of who you voted for, the fact that Trump got 5 million more votes than his opponent indicates that consumers are likely to feel more positive about a Trump administration,” he said.
When the topic of tariffs came up, Savovic had this to say: “You know, you hear these stories about a 60% tariff. I think it’s a play to get these people back to the bargaining table. I don’t think we’re going to have any 60% tariffs, but it would sure get another government’s attention and get them to come to their senses,” he observed, adding, “So, I think what he’s trying to do is level the playing field, and I would be surprised if our tariffs at least on China got any higher than they are now.”
Carlos Bosch, president, Violino North America:
Bosch, as did others interviewed for this story, mentioned issues including tariffs, unpredictable container costs and the need for businesses including restaurants to find a steady supply of workers.
Discussing freight costs, Bosch said, “Somebody must address this issue of fluctuating freight costs because they are hurting suppliers and retailers. Overnight, the carriers are using any excuse to go from $5,000 a container to $12,000 a container and there is no regulation on this. Granted, if you happen to have a contract rate the carriers will honor it and I am putting air quotations around the word honor because even with a contract, your goods may not on the vessel right away. Even if you pay a VIP rate there are delays and issues and added costs because the carriers are pretty much charging you whatever they feel like charging. This reminds me of the early days of cellphones. The bill would be so complicated, and the companies did a poor job explaining the charges.”
Since Violino produces much of its goods in China, the threat of new or higher tariffs aimed at China is something the company is keeping a watchful eye on. “Like other companies, since Covid we have had lots of headwinds and have worked hard to navigate them strategically with our dealers in mind, making sure we continue to provide them with a quality product and a great value,” Bosch said.
As a means of having its business challenged by new China tariffs, Violino is investing in a new factory based in Vietnam to avoid any disruption in production.
“We are going to have a presence in Vietnam with our own factory and a very focused line of new product,” Bosch told Home News Now. “These products will not be the same ones we are making in China. They will dovetail nicely with our China goods, and Vietnam will also allow us to pivot quickly to continue to fulfill our promises to our dealers,” he said. “Right now, I just don’t think Trump should prioritize the moving of anything that relates to furniture.”
Andy Counts, CEO, American Home Furnishings Alliance:
“We can expect the next Trump administration to be full of surprises. We anticipate they will quickly take steps to relieve the regulatory burden facing the industry. EPA is likely to take a closer look at the pending Formaldehyde Risk Assessment, and AHFA is working with other stakeholders to eliminate any risk associated with wood products and other home furnishings. OSHA is also likely to take a step back on proposed rules regarding heat-related injuries in the workplace. Although well intended, the proposal includes many prescriptive measures that ignore the commonsense efforts already in place at many factories.
“The ‘T’ word will likely be top of mind during the next administration. Tariffs will almost certainly be utilized to deter certain trade activities and to pay for other administration priorities. It remains to be seen what the extent of these will be and the impact on inflation and supply chains.
“Elections have consequences, and we expect leadership changes at various agencies will result in a change in priorities. AHFA will meet with transition officials to clearly communicate industry issues,” Counts said.
Tommy Leflein, independent sales representative and past president of IHFRA:
“My biggest concern involves what President Trump may do regarding tariffs. I believe that tariffs will result in furniture becoming more expensive. In addition, the tariffs will hurt companies that make lower-priced furniture. I don’t think President Trump is a fan of China, and I am concerned that he might make it very difficult for China to sell products here.”
Ray Allegrezza hit every point right out of the ballpark with this article. I thank you for being the voice of reason when it comes to the furniture industry!! You gave us all a lot to think about and you never let us forget we all all in this together.