European Luxury Furniture Makers Shielded from U.S. Tariffs—For Now
Milan, Italy—European luxury furniture manufacturers, particularly those in Italy, have found temporary relief from U.S. President Donald Trump’s recent tariffs. A newly negotiated 15 percent tariff cap on European Union exports, established in July, safeguards these luxury artisans from additional duties imposed on kitchen cabinets, bathroom vanities, and various upholstered wooden furniture pieces.
Continued Vigilance by Industry Leaders
Claudio Feltrin, president of Federlegno, Italy’s wood and furniture supply chain federation, expressed cautious optimism during a press conference at the unveiling of the new Salone del Mobile.Milano bridge-building event in Riyadh. He emphasized the importance of exploring opportunities in the Middle East as a counterbalance to the unpredictable U.S. trade policies.
“The tariffs have underscored the need for us all to diversify our markets. We have the expertise and recognition to succeed globally, but we must engage with emerging markets," Feltrin stated.
Trade Policies and Their Implications
President Trump has utilized Section 232 of the U.S. Trade Expansion Act, which permits the imposition of import restrictions purportedly tied to national security threats. Feltrin highlighted this backdrop as essential to understanding the complexities of current trade relations.
Opportunities in Saudi Arabia
According to recent data from FederlegnoArredo, Italy’s wood-furniture exports to Saudi Arabia surged by 16.9 percent in 2024, amounting to €288.3 million. This positions Saudi Arabia as Italy’s second-largest single market in the Middle East and North Africa for high-end furniture, claiming a notable 36 percent share of that market.
Maria Porro, president of Salone del Mobile.Milano, echoed Feltrin’s sentiments, noting the complicated situation in the U.S. and highlighting the vast potential in Saudi Arabia. “The U.S. market has experienced stagnation and contraction, while Saudi Arabia presents a promising horizon for growth,” she explained.
Challenges for the U.S. Furniture Industry
While European luxury brands may find temporary relief, the outlook remains bleak for small U.S. furniture businesses, especially those in states like Michigan and North Carolina, which rely heavily on imports for components.
Newly announced Section 232 tariffs include a 10 percent levy on softwood timber and a staggering 25 percent on kitchen cabinets and similar products. These tariffs are set to escalate to 30 to 50 percent by 2026. Exceptions will apply only to Japan and the U.K., with tariffs remaining at 15 and 10 percent, respectively.
Industry stakeholders are navigating the ramifications of these evolving trade policies, assessing the long-term impacts on business outcomes.
Inflation Pressures and Business Innovation
Gary Friedman, CEO of RH, warned that these additional tariffs would threaten the viability of North American furniture makers by inflating costs of supplies, adding yet another layer of difficulty for small to medium-sized manufacturers.
"The tariffs will certainly drive inflation, putting additional pressure on family-owned businesses across the nation,” Friedman noted, pointing out that U.S. inflation rose by 2.9 percent in August alone.
Additionally, Henrybuilt, a Seattle-based firm, highlighted how tariffs hinder access to innovative materials necessary for product development. Founder Scott Hudson remarked, “When purchasing these materials becomes difficult, it not only stalls innovation but jeopardizes the future of U.S. manufacturers who depend on international suppliers.”
Despite the advantages of a tariff cap, Hudson noted trepidation among clients about investing in European products. "The uncertainty surrounding future trade relations is a significant concern, overshadowing the immediate benefits we may experience," he added.
Looking Forward
Analysts like Cristina Fernandez from Telsey Advisory have raised concerns about the status of products from Mexico under the U.S.-Mexico-Canada Agreement, adding that consumers may ultimately bear the brunt of rising tariffs. "We anticipate additional price hikes in the coming months as companies try to balance their costs," she stated.
Conclusion
The current tariff landscape poses both challenges and opportunities for the luxury furniture market. While European makers enjoy temporary protection, U.S. counterparts grapple with rising costs and an uncertain future. As international relationships evolve, both sectors must adapt to survive in a shifting economic environment.
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