Trump's New Tariffs On Lumber, Furniture And Cabinets Just Went Into Effect - Will They Slow Down An Already Sluggish US Housing Market?

2025-10-15 02:44:39

(MENAFN- News Direct) >

Wood is the latest commodity on the chopping block.

President Trump's new tariffs on imports of wood and related products, including lumber, timber, kitchen cabinets and upholstered furniture, officially took effect on Tuesday.

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This is bad news for both consumers and the homebuilding industry, which has seen a spike in prices in recent months.

A 10% tariff on softwood lumber and timber may be shock enough to builders, but a 25% tariff on kitchen cabinets, bathroom vanities and upholstered wooden furniture is set to make prices for everyday consumers skyrocket.

But wait, there's more. The new tariffs have gone into effect, but the worst is yet to come. On January 1, 2026, the tariff on cabinets and bathroom vanities will increase to 50% and upholstered furniture to 30%.

Unlike Trump's tariffs on countries, these tariffs don't face legal challenges.

The National Association of Home Builders (NAHB) estimates that $14 billion, or 7%, of all goods used in new residential construction come from outside the U.S. [1]

Whether you're a buyer or a seller, here's what you need to know and what impact these changes could have on the market.

The U.S. lumber supply

Like other tariffs, these new measures are intended to expand domestic manufacturing and industry, though the changes may be slow.

“In my judgment, the actions in this proclamation will, among other things, strengthen supply chains, bolster industrial resilience, create high-quality jobs, and increase domestic capacity utilization for wood products such that the United States can fully satisfy domestic consumption while also creating economic benefits through increased exports,” Trump wrote in the proclamation.

The president has claimed Americans can do without Canadian lumber, which is integral to homebuilding in the U.S., but Canada accounts for nearly 85% of all U.S. lumber imports, according to the National Association of Homebuilders (NAHB). [2] In 2024, Canada supplied 23% of the softwood lumber consumed in the U.S., according to Forest Economic Advisors (FEA) data cited by Timberland Investment Resources. [3]

CNN reports that the United States has a supply of 300 billion trees, though experts warn that the industrial capacity isn't there to support harvesting trees on a larger scale. [4]

“And while this tariff is supposed to protect domestic lumber firms, recent data from the first quarter show that U.S. sawmills are operating at just 64% of their potential capacity, a figure that has dropped steadily since 2017. It will take years until domestic lumber production ramps up to meet the needs of our citizens,” said the NAHB in a press release.

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Rising furniture prices

Data from the Federal Reserve shows not only sharp increases in furniture costs since 2020, but also a corresponding rise in their cost of manufacturing. For consumers, this is more bad news as everyday living costs become increasingly untenable. There may be benefits for domestic furniture manufacturers, as increased demand for domestic goods will fuel production.

CNN reports that China and Vietnam are the country's top two suppliers of imported furniture, exporting $12 billion worth of furniture and fixtures just last year. These rising costs will see new homeowners paying more to outfit their houses, and may even have an impact on home staging.

Home sellers typically spend $1,844 to stage their homes, according to HomeAdvisor, [5] but higher prices for goods like furniture may see sellers either pay more or forego staging, which could cost them.

A challenged housing market

The housing market is already in a bind. High interest rates and low inventory have kept homeowners from investing in new properties, and sales have been sluggish over the past few years.

CNN reports the housing market is currently caught in a stalemate. [6] Sellers are still asking for higher prices than the market will bear, and are pulling their homes off the market at higher rates than seen previously. Buyers are now increasingly willing to walk away from an offer, and sellers are largely unwilling to budge on pricing. The current higher mortgage rates are also preventing buyers from making moves.

The New York Times also reports that construction of new single-family homes has fallen to its lowest level since July 2024. [7]

Countervailing and anti-dumping duties on Canadian lumber had already increased from 14.5% to 35% in recent weeks, and Trump's latest actions will take it to 45%, said the NAHB.

“These new tariffs will create additional headwinds for an already challenged housing market by further raising construction and renovation costs,” said NAHB chairman Buddy Hughes.

The cost of goods needed to build new homes have been rising.“Building material prices were up 0.3% in August and up 3.4% compared to one year ago,” said the NAHB in a report on inputs to the new residential construction. [8]“This was the second straight month of above 3% price growth, after increasing 3.3% in July. The August yearly increase was the largest since building material prices rose 4.9% in January of 2023.”

“These tariffs are really hard to understand given that the president has said to his supporters, 'I want to bring down inflation, I want to bring down interest rates, I want to help create an ownership society for you and your other friends and family members,'” said Anirban Basu, chief economist at the Associated Builders and Contractors, in an interview with The New York Times.

“It runs counter to the goals of making housing more affordable,” said Daryl Fairweather, chief economist at Redfin, to The New York Times. [9]“In the end, you're just going to get fewer homes built.”

However, the U.S. Lumber Coalition, which is firmly pro-tariff, applauded Trump's actions and said the NAHB was peddling“the false narrative that holding Canada to account for its ever-increasing and egregious unfair trade practices will somehow exacerbate the problem of U.S. housing affordability.”

"What NAHB won't point out is that lumber prices have declined since antidumping and countervailing duties increased to 35.16%, nor will NAHB point out that their own data shows that lumber makes up less than 2% of the cost of an average new single family home, and especially not that their own profit margins in recent years have increased from 11% to almost 16%," said Zoltan van Heyningen, executive director of the U.S. Lumber Coalition.

Basu pointed out that while the move may be good for domestic producers, furniture-making is labor intensive, and those jobs probably won't move to the U.S. where the cost of labor is high.