BLOG — June 24, 2025

Furniture firms roll out tariff plans

Key Findings

  • Furniture firms have well-established playbooks, likely driving a lower net-negativity of comments on earnings calls about tariffs compared with the net-negativity for all consumer discretionary firms.
  • Disruptions to shipping linked to the rapid changes in US tariff policy led to delayed shipments and lost sales during the outdoor furniture sales season, according to one retailer. US seaborne imports of furniture fell by 4.3% year over year in May 2025 after climbing 25.6% in April. 
  • Firms have scaled up inventories to preempt duties and provide sales flexibility. Taking the four big furniture retailers together, inventories rose to an average 76 days from 70 days a year earlier.
  • Price rises have been used sparingly by the furniture retailers. Burden-sharing with suppliers by negotiating lower import prices was evident during the 2019 tariff round, with imports from mainland China getting 2.7% cheaper year over year in March 2020 while imports from ASEAN increased 0.2%. A similar pattern has occurred in 2025 with mainland China up by 1.6% and ASEAN down by 0.3% as of May 2025.
  • Reshoring of manufacturing is a long-term strategy. Mainland Chinese suppliers’ share of US imports fell to 30.2% in the past 12 months from 59.6% in 2017 with ASEAN suppliers being the main winners. The big four furniture retailers are also expanding their production in the US, potentially leading to a regionalization in North America that is closer to that seen in Europe and ASEAN.
Household durables firms are less negative than average about tariffs

How is the furniture sector coping with tariffs?

The US furniture manufacturing and retail sector, in common with other consumer discretionary products, faced a variety of tariff-related challenges in 2025.

US imports of mainland Chinese wooden bedroom furniture have had tariffs applied since 2005. These were expanded to a wide selection of products at a rate of 7.5% under the Section 301 tariff program applied by the first Trump administration since Sept. 1, 2019.

There is a new round of challenges resulting from the increase in import duty rates on imports from mainland China to 30% under the International Emergency Economic Powers Act (IEEPA) deficit and fentanyl programs, as well as raised duties from all sources under IEEPA deficit tariffs. These could rise further from July 9 for non-Chinese imports and Aug. 12 for Chinese imports. 

The major furniture retailers have all enumerated tariff-coping plans. The prior experience with tariffs and established plans may explain a less negative position for furniture retail managers versus their peers.

S&P Global Market Intelligence data shows the balance of the share of positive and negative mentions of tariffs by household durables and specialty retail firms was negative 2.5% compared with negative 4.5% for all consumer discretionary firms in calls held between April 1 and June 13, 2025.

That represented an improvement from negative 5.4% in the second quarter and reflects both more positive mentions (31.4% of mentions were positive in the past three months from 26.7% in the first quarter), including firms that are moving sourcing locally.

Negative mentions also increased, but less quickly (33.8% from 32.1%) reflecting a worse-than-expected drag on sales due to stock availability and consumer confidence.

Furniture imports face series of seasonal delivery periods

How do tariff changes drive shipment volatility?

The disruptions to sourcing decisions resulting from the volatility in tariff-setting during April and May 2025 have led to commercial challenges linked to product availability.

One retailer noted that “due to significant and unexpected tariffs announced on April 2, shipments and sourcing efforts were disrupted globally,” which will negatively impact revenues by approximately 6 points in the second quarter. Timing is key as “outdoor furniture season is a relatively short season, if you miss that season, the peak of that season, that's hard to make up.”

The scale of the sales problem shouldn’t be overstated though, with US retail sales in the furniture sector having increased by 1.2% sequentially on a seasonally adjusted basis in May after a 0.7% rise in April, according to official figures.

The volatility in shipments is more of an issue and can be seen in US seaborne imports of furniture products, which fell by 4.3% year over year in May 2025, Market Intelligence data shows, including a 9.2% slide in shipments into the US west coast ports. That followed a 19.8% increase in total imports in the first quarter of 2025 and a 25.6% increase in April.

Imports track several peaks during the year including the spring outdoor season, back-to-school office and bedroom furniture as well as pre-winter holiday living and dining room improvements. Sequentially, US seaborne imports of furniture fell by 8.8% year over year in May versus April, while in the prior 10 years shipments increased by 11.7%.

The shipment volatility has been exacerbated by a rapid build-up in inventories on hand. One firm noted that its “inventory levels and net cash providing substantial flexibility to weather tariff distractions,” which were the result of the firm “building higher-than-normal inventory ahead” of potential duties. Another noted it had made “strategic inventory moves” rather than broad-brush changes.

Taking a weighted average of the four, inventories reached 76 days of sales in the latest quarter, up from 70 a year earlier.

What pricing and cost strategies is the sector deploying?

The retail sector more broadly has shown price increases are a widely used tactic to deal with tariffs, though it comes with political risks. The furniture retailers have been selective in their use of price rises.

One firm noted it had used “surgical and strategic price increases last month and is pleased with the performance since being implemented” with regards to the risk of lost sales that could result from customer affordability issues.

Another stated it is “carefully taking select price increases on products that offer strong value with a focus on maintaining competitive pricing,” recognizing the market share risk from price rises.

Profitability also plays into the pricing decision, with one firm noting it has “structurally higher gross margins than many of our competitors (which) means that the effective price increase that we need to take is relatively smaller.”

Looking at the prior tariff round, Market Intelligence analysis shows that US import prices for furniture and similar goods from mainland China fell by 2.7% in March 2020 versus March 2019, while imports from the ASEAN region increased by 0.2% over the same period.

More recently, prices for imports from mainland China fell by 1.6% year over year in May 2025 while imports from the ASEAN region fell by 0.3%, indicating burden sharing with suppliers may already be taking place.

ASEAN suppliers gain most share after tariffs applied to mainland China

What are the furniture sector's plans for reshoring?

As flagged already, the furniture sector has been going through an ongoing process of reshoring linked to tariffs since the early 2000s, particularly moving sourcing for the United States away from mainland China.

Over the longer term, mainland Chinese suppliers’ share of US imports of furniture fell to 30.2% in the 12 months to April 30, 2025 from 59.6% in 2017. It is worth noting that the downturn has been continual, falling to 51.2% in 2019 and 41.2% in 2021, indicating that reshoring is not a work of moments.

The main winners have been suppliers from the ASEAN region, whose share increased by 23.4 percentage points to reach 36.0% of US imports, while suppliers from Mexico and Canada increased by 2.6 percentage points to 18.1%.

There are also indications of a shift in manufacturing back to the United States by all four major furniture retailers, including as part of strategies to “manufacture closer to the users of the product."

As with international reshoring, moving production back to the US is a long time-frame proposition, with one firm noting it has “re-sourced a significant portion of our posted furniture to our own factories where we’ve been operating 10 years.”

While reducing the tariff burden for assembled products, firms still face costs for sourcing for the components and materials, especially if the Section 232 review of the forestry sector leads to duties.

More localization would leave North American supply chains looking more like other regions where intra-regional trade dominates. For example, EU-based sources accounted for 60% of EU imports of furniture products in 2024, while ASEAN suppliers accounted for 74% of ASEAN imports. By contrast, intra-North American trade accounts for just 19% of North American imports.


This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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