The furniture industry largely escaped the latest skirmish in the growing tariff dispute between the U.S. and China, beyond the previously announced tariffs on steel and aluminum, the full impact of which remains to be seen.
And just as there is a division between the two economic superpowers, so too there may be a division within the furniture industry over the desired results of this volatile economic dispute. Certainly some domestic manufacturers might have liked to see finished furniture (upholstery and motion in particular) on the list of goods getting hit with a 25% import tariff. Many of those same companies would be deeply concerned if tariffs on finished textiles, such as cut-and-sew kits, were included on the same list.
This is one of the problems of viewing this dispute as a zero-sum game, in which a loss for one side represents a gain for the other. The lines within the furniture industry are far too blurry for anyone to think there will be clear winners and losers should the current tariff dispute escalate.
There is an economic law of unintended consequences dating back hundreds of year and still an integral part of economic theory, which holds that the actions of governments always have unanticipated and unintended consequences. And if ever that applied, it is here and now.
There are layers upon layers of products, equipment and materials that could get caught up in any growing tariff dispute between the U.S. and China. And that is just at the level of primary consequences.
Already the stock market is seeing more turbulence stemming from growing economic uncertainty. And even those whose day-to-day activities are little impacted by the rise and fall of the Dow can be unnerved by reports of massive stock drops or pending trade wars.
Consumer willingness to spend on big ticket purchases is always enhanced by economic and social stability. When people are concerned about their financial future, they are more likely to defer large home projects and make do with what they have.
It’s unclear what a next round of tariffs might include, although it seems increasingly likely that there will be another round. It’s even less clear what the results of such economic brinkmanship may have on domestic or international furniture manufacturers.
What does seem clear is that the best result for the furniture industry would be a swift resolution of the dispute and a return to a level of economic certainty that would encourage consumers to feel confident about spending to enhance their home or apartment.
Turmoil makes for catchy headlines but not a favorable selling environment.
Heading into next week’s High Point Market, it is a relief to see that furniture has not become embroiled in a U.S.-China economic dispute. It would be in the entire industry’s interest to see that continue.