The Canadian Kitchen Cabinet Association appreciates the postponement of tariff increases on furniture, cabinets, and vanities by U.S. President Donald Trump. However, the industry continues to suffer from the existing duties. Trump imposed 25 per cent tariffs in October, halting a planned escalation to 30 per cent for upholstered furniture and 50 per cent for cabinets and vanities scheduled for January 1.
Luke Elias, the association’s vice-president, noted that although a 50 per cent tariff relief is welcomed, the industry is still grappling with the impact of the initial 25 per cent duty. The kitchen cabinet manufacturing sector, valued at $4.7 billion in Canada, exports approximately $600 million worth of products annually. These tariffs have compounded challenges for the industry, already coping with a sluggish Canadian housing market.
One of the affected companies, Manitoba-based Elias Woodwork, employs over 400 individuals and ships about 80 per cent of its products to the United States. The company’s president, Ralph Fehr, stated that while the 25 per cent tariffs have been detrimental, a 50 per cent duty would have been catastrophic, discouraging U.S. customers from paying extra for Canadian goods.
Fehr emphasized that his company utilizes American materials, like hardwood lumber from the Appalachians, to manufacture products sold in the U.S. Over the past 45 years, Fehr has built a business based on exporting to the United States, hoping for government intervention to reach a resolution.
The tariffs have eroded profits for Elias Woodwork, prompting cost-cutting measures to weather the challenging business environment. Layoffs have already commenced within the industry since the tariffs’ implementation. Meetings in December revealed concerns about impending job losses, indicating a critical situation.
Elias advocated for Ottawa to extend procurement policies for the building industry, including provincial incentives, to support the sector. He also highlighted the issue of parts imports at below market value, adversely affecting American cabinet and furniture manufacturers. The influx of low-priced parts from Asia assembled in Canada and labeled as “made-in-Canada” has undercut the domestic industry.
In 2020, the U.S. Commerce Department imposed duties on cabinets from China due to anti-dumping and countervailing concerns. The American Kitchen Cabinet Alliance accused Canada and Mexico of being conduits to circumvent these measures, emphasizing the need for stricter rules-of-origin requirements to prevent dumping in North America.
As the CUSMA review looms, tensions are expected in negotiations, with a focus on reinforcing North American manufacturing. Trump’s stance on potentially exiting the trade pact adds uncertainty to the situation. Despite efforts to address sectoral duties, trade talks with Ontario contributed to strained relations and hindered potential relief for Canada.
Elias stressed the importance of prioritizing the cabinet and furniture industry in CUSMA discussions, as it directly impacts thousands of companies and over 25,000 Canadian jobs. The industry’s significance in every household underscores the need for attention amidst ongoing trade challenges.