by Last week, President Trump made good on a previous promise to slap a 25% tariff on imports from Canada and Mexico as a means of halting illegal immigrants and fentanyl from coming into this country.
As part of that plan, he also imposed an additional 10% tariff on imports from China as well. The response from those countries was swift, with many observers saying the stage is now set for a trade war.
Canada said it would impose 25% tariffs on 155 billion Canadian dollars ($106 billion) worth of goods from the U.S., while Mexico said it would take non-tariff measures as well as impose tariffs on U.S. goods.
China said it would file a lawsuit with the World Trade Organization and look to take additional countermeasures.
As of Monday morning, Feb. 3, the S&P 500, Nasdaq and Dow Jones Industrial all were down more than 1% upon opening.
But now, as I write this column, I’ve learned that Mexico’s President Claudia Sheinbaum just posted that she and her team had a “good conversation” with President Trump and they reached a series of agreements that will put tariffs targeted at Mexico on hold for a month. (Note: An agreement also was reached with Canada to put tariffs on hold for a month.)
You can see her post here.
Based on Sheinbaum’s post, this is an incredibly fluid issue that can change at the drop of a hat or a phone call.
While I think it is safe to say that none of us can predict what impact the Trump administration may have on our sector, I thought it would be a good idea to chat with some astute industry observers to get their read on this topic.
What follows are the comments from some of the people who helped me put this column together.
On the topic of tariffs, Charlie Malouf, president and CEO of Broad River Retail, said, “Tariffs tend to be inflationary, so it would seem reasonable to expect some level of inflationary pressure on the price of our products depending on where they’re sourced from. It could also contribute to some supply chain disruptions.”
He added, “My opinion is that Trump wants to help American businesses and American industries do well, so I’m not sure on this one. “
John Pinion IV, a veteran independent sales representative and chairman of IHFRA, said, “These tariffs, which could reach up to 25%, are likely to increase the cost of imported materials and finished goods.”
When asked what impact this might have on consumers, Pinion said, “The immediate and obvious negative is higher prices for the consumer. I don’t see the tariffs going away even with the upset and protest. This is going to be a big revenue stream for the government, and I have not seen the government of either party give up large revenue streams once implemented.”
Pinion underscored that point by adding, “One example is that Biden kept many Trump-era tariffs in place.”
Grand Home Furnishings President George Cartledge III shared the following views regarding the current Trump tariffs: “We have a record of Trump’s tariffs from his first administration. Also, because of the recent election results, citizens wanted change, which elevates consumer confidence,” he said, adding, “Most of all, peace in the world makes consumers feel more confident.”
Cartledge also noted that Scott Bessent, treasury secretary, has highlighted that tariffs were “all that was used in the early 20th century to play internationally. “
Lastly, Cartledge said, “People just feel better and more stable and confident with Washington now, all drivers that can positively impact consumer spending.”
“Plus, the number of home renovations shows people at all incomes are interested in their homes,” Cartledge said.
John DeFalco, senior executive vice president of sales and marketing at Primo International, a whole-home source based in Canada, said, “The industry is facing tariffs out of Mexico and Canada and potentially tariffs from other furniture-producing countries.”
He added, “This could be a benefit for American producers, although the industry does not produce sufficient product domestically to cover the needs of the American consumers.”
However, looking at the big picture, DeFalco said, “If all countries end up with tariffs and the playing field is equal to all, the tariffs may not have a devastating effect on our business.”
