Possible tariffs major topic at AHFA’s annual meeting

One of the major headlines coming out of last week’s annual meeting of the American Home Furnishings Alliance is that President-elect Trump is likely to make good on his promises of imposing stiff tariffs on countries not producing products here and that China may be hit the hardest, with tariffs as steep as 60%.

Doug Bassett, president of Virginia-based Vaughan-Bassett Furniture, was at that meeting and confirmed that the AHFA’s government affairs team gave an hourlong presentation, with some of it focused specifically on the upcoming tariffs the team believes the Trump administration will impose soon after taking office.

Bassett said that the presenters believe that Trump will announce global tariffs of anywhere from 10% to 20% for most countries and a tariff of up to 60% for China.

During the meeting, Bassett said that several pro-Trump importers asked if the tariffs were “just Trump bluster” and were distressed when the presenters explained that Trump will need the tariff revenue to cover the cost of extending the Trump tax cuts, explaining that the law requires a corresponding offset in either spending cuts or tax increases.

As the government affairs team explained, Trump can keep both the tax cut promise and the tariff promise together or fail to do either and break both promises.

Bassett also said the presenters believed that President-elect Trump will keep both promises and, to that end, to expect the tariffs to initially apply to all goods from all countries except China and that the tariffs will likely range from 10% to 20%. For China, they said, expect up to 60% tariffs.

While some industry players I’ve spoken with don’t think Trump will make good on his promise of imposing tariffs, he had consistently promised to impose tariffs all during his campaign and at a recent meeting hosted by the Chicago Economic Club, the president-elect said, “To me, the most beautiful word in the dictionary is tariff.”

Bassett said that while the government affairs team acknowledged that some of the tariffs may eventually get negotiated down, country by country and item by item, they were convinced that initially, across-the-board tariffs are likely and may be imposed early in 2025 by executive order from Trump.

At the meeting, some attendees expressed concern that the tariffs could lead to increased inflation, but Bassett noted that, “We also had an economist speak to us about that and he said that since two-thirds of the U.S. economy is service related and only one-third of the GDP is related to goods, the tariffs would likely not be as inflationary as one might fear.”

However, what the tariffs could impact is the demand for domestically made furniture. In fact, Bassett said his company has already seen a dramatic boost in orders from some of their biggest dealers.

“Clearly, these dealers are opting to lower their exposure to imported furniture and carry as much domestic products as fast as they can,” Bassett confirmed, adding, “When we went home from market two weeks ago, we got orders from one of our largest dealers for one of our new groups that same week and it’s already shipped. He ordered the second group this week and he wants it in two weeks.”

Depending on where you are making your furniture, tariffs can either be a blessing or a curse. Either way, we certainly appear to be heading into interesting times.

And while the phrase “May you live in interesting times” is widely reported as being of ancient Chinese origin, it apparently is neither Chinese nor ancient, being recent and Western.

Interesting times, indeed!