Tariff discussions loom large at Interwoven

Companies field questions on the subject during the event but definitive answers are proving to be elusive this early in the game

HIGH POINT — Conversations at this week’s Interwoven fabric show here focused on some of the typical issues you’d expect, ranging from new colors and patterns to pricing and availability.

But according to many exhibitors we spoke to at the event, tariffs also entered many discussions, in some cases taking top billing among the issues at hand.

It’s a subject that has captivated the industry since the election, as the incoming Trump administration is seeking ways to fund tax cuts that were promised during the campaign. Perhaps the most obvious solution is tariffs, a word that Trump has reportedly called “the most beautiful word in the dictionary.”

Perhaps not so much for the home furnishings industry — along with many others (think anything from automobiles and electronics to home appliances and apparel) that support many U.S jobs. — that has come to rely entirely on a global supply chain.

China may be the most in the crosshairs, facing tariffs upwards of 60%. In response, some countries have reportedly moved or are moving some production to Vietnam. That includes Z-Wovens, which in addition to its main facility in China, has a facility currently producing in Vietnam and a new facility that is set to open in early 2025.

“Tariffs were a discussion,” said Chip Finneran, vice president of sales at Z-Wovens and Sunbelievable, a separate category of fabrics within the Z-Wovens line. “Our main facility is located in China, and we will address the tariffs accordingly as they unfold.”

Its message to customers at Interwoven is that it is well positioned in Vietnam. At the front of its showroom, it had a video of its new state-of-the art Vietnam facility, which has capacity to weave, finish and cut and sew fabrics. It is currently producing 300,000 yards a month of fabric, which will increase to 1 million yards per month in early 2025, compared to 3 million per month in China.

Yet Vietnam along with other countries could also be a target in the realm of global tariffs. Given the escalating number of Vietnam exports ranging from furniture and apparel to shoes and electronics, it too could be on the administration’s radar and potentially could face rates between 10% and 20%.

To be sure, no one is certain what will happen, which leaves many questions in the minds of both suppliers and customers alike.

“The topic of every conversation I have sat in on is tariffs,” said Jeannie Corey, director of merchandising/retail sales at Richloom. “We don’t know what they are going to be so we can’t speculate. I don’t want to say that the mood is anything but worry.”

Others also said that tariffs have come up in the conversation, although few have answers. Domestic producers ranging from Sunbrella to Brentwood and sister companies STI and Revolution likely will rely on their domestic capacity to help fill demand from wholesalers and retailers alike.

Richloom also owns and operates a domestic plant in High Point as part of its global supply chain that also includes countries that in addition to China include India, Pakistan and Turkey.

Culp also touted its global supply chain that, in addition to China, includes Vietnam, Mexico and Turkey.

“We are just prepared with options and have options in our supply base,” Iv Culp, president and chief executive officer of Culp Inc. told Home News Now. “We don’t know what will happen, but we believe we have a great model and are prepared to pivot.”

Companies also touted a mix of more product available at entry-level price points, signaling their cost-competitiveness should tariffs become an issue. For example, Culp had 30% more offerings than normal in its starting prices from $2.95 to $4 a yard.

“It is a significant increase,” said Tammy Buckner, senior vice president of design and marketing at Culp, of the starting prices, noting that many manufacturers have been seeking sharper price points. “We look for that low-cost manufacturer wherever they are in the world and that has allowed our design team to have every crayon in hand at the turn of a dime. When we see a trend coming or changing, we can go and find the equipment somewhere to make that look.”

Mary Beth Hunsberger, president of Culp Upholstery Fabrics, added that she believes China remains a key in the fabric manufacturing realm despite the unknowns.

“China is really just the most important and strongest area for manufacturing,” she said. “So we will all face whatever we face when we see what happens there. I was just in China and Vietnam last week and hearing from customers, there is just a lot of wait and see. There is a lot of unpredictability to the situation and things going on behind the scenes, but we haven’t seen any level of panic from our customers or anything like that. But the nice thing about us being a global company is we can flex and pivot anywhere in the world.”

Jay Carlson, president of Nice Link Home Furnishings, said that some customers are asking if it has begun to source from Vietnam as opposed to China, which produces all its fabric.

“It is a huge capital expenditure to build mills and finishing in Vietnam, and we have proven that as you have seen on the furniture side, when the time is right we will make that move,” he said. “But I don’t always trust the stroke of a pen in the law that is just going to make us move countries quickly. We want to wait and see.”

He said that while he admires what some competitors are doing in making the shift, it’s unclear what the return on those types of investments will be, particularly given that there could also be tariffs on countries such as Vietnam.

Today he believes that China product remains a very high value as prices have dropped as much as 40% on some of its products over the past decade.

“So let’s just say that China ends up with a 30% to 40% tariff or something like that; I still believe that it’s still going to be a value even related to duties and tariffs,” he said, adding that there also could be currency fluctuations in Asia that will also impact pricing.

And while some importers say that while there is domestic capacity to fall back upon, it’s unknown to what degree it might fall short of expectations.

“Everyone is exploring a Plan B, but no one knows that that is going to be,” said Jim Ennis, president and chief executive officer of Vision Fabrics, which has production in Vietnam, Taiwan, Thailand, Turkey, India, South Korea and the U.S. “We are working very hard on it. The question is when do you engage it? Once you start resourcing, there is no turning back.”