Donald Trump's new tariffs on wood and furniture aim to boost US industries and protect national security. Photo / AFP
Donald Trump's new tariffs on wood and furniture aim to boost US industries and protect national security. Photo / AFP
United States President Donald Trump’s fresh tariffs on imported wood, furniture and kitchen cabinets took effect today, a development likely to fuel building costs and pile pressure on home buyers in an already challenging market.
The duties were imposed to boost US industries and protect national security, according tothe White House, and they broaden a slate of sector-specific tariffs Trump has imposed since returning to the presidency.
The latest salvo features a 10% tariff on imports of softwood lumber, while duties on certain upholstered furniture and kitchen cabinets start at 25%.
Come January 1, the rate on imported upholstered furniture is set to rise to 30%, while those on kitchen cabinets and vanities will jump to 50%.
But duties on wood products from Britain will not exceed 10%, and those from the European Union and Japan face a 15% ceiling.
All three trading partners have reached deals with the Trump Administration to avert harsher duties.
The new tariffs will “create additional headwinds for an already challenged housing market by further raising construction and renovation costs,” warned US National Association of Home Builders chairman Buddy Hughes.
The tariffs include a 10% duty on softwood lumber and up to 50% on kitchen cabinets. Photo / Getty Images
US home sales have been gloomy in recent years with high mortgage rates and limited inventory pushing costs up for buyers.
In imposing the latest duties, Trump said the Commerce Secretary found that “wood products are used in critical functions of the [Defence Department], including building infrastructure for operational testing”.
Trump’s proclamation added that US wood production “remains underdeveloped”, leaving the country import-dependent.
Hughes said: “Imposing these tariffs under a ‘national security’ pretext ignores the importance housing plays to the physical and economic security of all Americans”.
He urged for deals that instead “roll back tariffs on building materials”.
Canada, the top supplier of lumber to the United States, is set to be impacted.
The 10% lumber tariff stacks on anti-dumping and countervailing duties the country faces, and the US recently more than doubled these to 35%.
This means that Trump’s latest action brings duties on Canadian lumber to 45%.
Canada, the top lumber supplier to the US, now faces combined duties of 45%. Photo / Getty Images
The BC Lumber Trade Council, which represents British Columbian lumber producers in Canada on trade matters, in September called the new tariffs “misguided and unnecessary”.
“This will impose needless strain on the North American market, threaten jobs on both sides of the border, and make it harder to address the housing supply crisis in the US,” the council added.
Stephen Brown of Capital Economics told AFP that with 30% of lumber sourced from abroad, a 10% tariff could raise the cost of building an average home by US$2200.
Brown added that China, Vietnam, and Mexico account for the bulk of US furniture imports.
“The US gets 27% of its furniture imports from China and then almost 20% from both Vietnam and Mexico,” he told AFP.
He expects Vietnam could face the biggest impact “as furniture makes up 10% of its exports to the US”.
The corresponding figures are smaller at 4% for China and 2.5% for Mexico.
The tariffs were imposed under Section 232 of the Trade Expansion Act of 1962, the same authority Trump used to roll out steel, aluminium and auto duties this year.
Products subject to sector-specific tariffs are not doubly hit by countrywide levels that Trump has separately imposed, which are in some cases higher.
