The Canadian Kitchen Cabinet Association has expressed its gratitude for the decision by U.S. President Donald Trump to delay the planned tariff hikes on furniture, cabinets, and vanities. However, the industry continues to face significant challenges due to the existing tariffs imposed by the U.S. government.
In October, Trump imposed 25 per cent tariffs on the sector, but he postponed a further increase that would have raised the tariffs to 30 per cent for upholstered furniture and 50 per cent for cabinets and vanities, which was initially scheduled for January 1.
Luke Elias, the vice-president of the association, acknowledged the relief provided by the postponement but highlighted that the industry is still struggling to cope with the existing 25 per cent tariffs. He emphasized that it is not feasible to mitigate the impact overnight in the manufacturing sector.
The kitchen cabinet manufacturing sector in Canada is valued at $4.7 billion, with approximately $600 million worth of products exported annually. The tariffs imposed by Trump have added to the challenges faced by the industry, which is already dealing with a subdued Canadian housing market, according to Elias.
Ralph Fehr, the president of Manitoba-based Elias Woodwork, which employs over 400 people and exports a significant portion of its products to the U.S., stated that the 25 per cent tariffs have had a damaging effect on the company. He noted that a 50 per cent duty would have been catastrophic, as it would deter U.S. consumers from purchasing Canadian-made products due to the increased costs.
Fehr explained that his company utilizes American materials, such as hardwood lumber sourced from the Appalachians, to manufacture finished products for the U.S. market. He expressed hope that the Canadian government would advocate on behalf of the industry to reach a favorable agreement regarding the tariffs.
Since the implementation of Trump’s tariffs in October, the industry has witnessed layoffs, with multiple companies warning of impending job losses during industry meetings in December, Elias (unrelated to Elias Woodwork) noted. The situation has become critical, with companies facing significant challenges.
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Elias emphasized the importance of extending Ottawa’s Build Canada procurement policies to include all taxpayer incentives for the construction industry, including those at the provincial level. He also called for addressing the issue of parts imports entering Canada below market value, which has been a point of contention for the American cabinet and furniture industry.
He raised concerns about low-priced parts from Asia being imported into Canada, assembled, and sold in the U.S. under a “made-in-Canada” label, which undermines the domestic industry. In response, the U.S. Commerce Department imposed anti-dumping and countervailing duty orders on cabinets from China in 2020.
Looking ahead, the American Kitchen Cabinet Alliance aims to strengthen rules-of-origin requirements under the CUSMA agreement to prevent the influx of cheap products into Canada or Mexico. The upcoming CUSMA negotiations are expected to be tense, with Trump signaling a willingness to walk away from the trade pact.
Despite efforts by Ottawa to find a resolution to the sectoral duties imposed by Trump, trade talks were halted in October following a dispute over tariffs. As the CUSMA review looms, Elias stressed the need to prioritize the cabinet and furniture industry, which employs over 25,000 Canadians across 3,500 companies.
“Kitchen cabinets are essential in every home, yet the industry continues to face significant challenges that cannot be overlooked,” Elias concluded.