The Canadian Kitchen Cabinet Association has expressed gratitude for the postponement of tariff increases on furniture, cabinets, and vanities by U.S. President Donald Trump. Despite this, the industry continues to suffer from the impact of the existing tariffs. Initially set at 25%, Trump’s tariffs on the sector were to rise to 30% for upholstered furniture and 50% for cabinets and vanities on January 1, but the increase was put on hold.
According to Luke Elias, the association’s vice-president, while the postponement to 50% provides some relief, the industry is still struggling to recover from the initial 25% tariffs. The kitchen cabinet manufacturing sector, valued at $4.7 billion in Canada, exports around $600 million worth of products annually. The additional tariffs have compounded challenges faced by the industry due to a soft Canadian housing market.
Ralph Fehr, president of Manitoba-based Elias Woodwork, highlighted the detrimental impact of the 25% tariffs on his company, which employs over 400 individuals and exports 80% of its products to the U.S. Fehr emphasized that a 50% duty would have been catastrophic for the business, as it relies on American materials, such as hardwood lumber from the Appalachians, to produce goods sold in the U.S.
Fehr urged Ottawa to advocate for the industry and seek a resolution to the tariff issue, as the current situation has eroded profits. Layoffs have been reported in the sector since the implementation of Trump’s tariffs, with companies warning of imminent job losses at industry meetings in December.
Looking ahead, Elias emphasized the importance of not overlooking the cabinet and furniture industry during the upcoming CUSMA review. He called for the extension of taxpayer incentives and procurement policies to support the sector, stressing the need to address the impact of low-priced parts imported into Canada from Asia, which are assembled and sold in the U.S. under a “made-in-Canada” label.
The American Kitchen Cabinet Alliance has accused Canada and Mexico of circumventing anti-dumping measures imposed by the U.S. Commerce Department on Chinese cabinets, suggesting that these countries serve as conduits for Chinese products entering the American market. As discussions on CUSMA unfold, efforts to strengthen rules-of-origin requirements are underway to prevent the influx of cheap products into North America.
In conclusion, with the CUSMA review looming and tensions rising, the cabinet and furniture industry is seeking relief from the challenges posed by tariffs. It is crucial that the sector’s concerns are addressed to safeguard the livelihoods of thousands of Canadians employed in this industry.
