As new U.S. tariffs ripple through the economy, American furniture manufacturers are warning of rising costs and shrinking profit margins. The latest round of trade duties, imposed under Donald Trump's administration, has forced companies to absorb much of the financial strain while trying to keep prices low for consumers.
© Flexsteel
Flexsteel is one of the furniture makers that is bracing for price increases amid increasing tariff pressures.
According to Goldman Sachs, firms had passed only 37 per cent of new tariffs on to consumers by August, leaving over half of the burden absorbed internally. However, analysts say this strategy is unsustainable as investors push for stronger returns.
Flexsteel, a leading U.S. furniture maker, said the uncertainty surrounding tariffs made it impossible to offer financial guidance for the next quarter. Chief executive Derek Schmidt told investors that the new trade measures would "trigger a broad-based increase in furniture prices across the United States", lowering consumer demand and squeezing profit margins throughout the supply chain.
With many home furnishings imported from China, the sector is particularly vulnerable. Industry analysts warn that furniture prices are likely to continue climbing as manufacturers, retailers and suppliers pass more of the costs on to households, extending inflationary pressures into the coming year.
Source: www.nytimes.com
