New Trump administration tariffs began today on imports of wood products like furniture, kitchen cabinets and lumber. The levies range from 10% to 50% as the administration looks to boost the domestic logging and furniture industries.
Critics contend the increased fees could result in higher prices for consumers and negatively affect the home-building industry.
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Reaction to the new tariffs
Some American manufacturers, such as furniture maker Ethan Allen, support the new tariffs, saying they will guard against competition from low-priced foreign goods. Farooq Kathwari, CEO of Ethan Allen, told The New York Times that his company manufactures about half of its products in the U.S.
“Tariffs are affecting us less, but it certainly is going to affect our industry,” Kathwari said.
But Daryl Fairweather, chief economist at real estate broker Redfin, said the tariffs could create unintended consequences.
“It runs counter to the goals of making housing more affordable,” he said. “In the end, you’re just going to get fewer homes built.”
US-China battle over tariffs and trade
The new tariffs come as President Donald Trump appears to be locked in a trade battle with China.
On his Truth Social platform on Friday, Trump accused China of exerting an “extraordinarily aggressive position” on controlling its exports. China has restricted exports of rare earth minerals, which are used in the automotive industry, in electronics such as smartphones and in the energy sector.
Trump vowed to retaliate with a blanket 100% tariff on Chinese products on November 1. He also said he would impose controls of U.S. exports of what he called “critical software”.
His announcement sent a shock through the stock market, with the Dow Jones Industrial Average dropping more than 900 points on Friday.
By Monday, Trump had reversed course.
“Don’t worry about China, it will all be fine!” he wrote. “Highly respected President XI just had a bad moment.”
On Monday, the stock market rebounded, with the Dow rising by nearly 600 points.
Possible presidential meeting in South Korea
New port fees are also in place in both China and the U.S, and the trade disagreement called into question a planned meeting later this month between Trump and Chinese leader Xi Jinping in South Korea. But Reuters reported Tuesday that Treasury Secretary Scott Bessent said the two sides have “de-escalated” the trade barbs and the meeting between the two leaders “is still on”.
Both sides now claim the ball is in the other’s court.
“If the US continues on its wrong course,” Bloomberg News quoted the Chinese Foreign Ministry as saying, “China will firmly take necessary measures to safeguard its legitimate rights and interests.”
Bessent countered: “This is China versus the world. They have pointed a bazooka at the supply chains and the industrial base of the entire free world. And you know, we’re not going to have it.”
Current trade status
All of this takes place as a trade truce remains in effect between the U.S. and China until Nov. 10.
In the meantime, the Peterson Institute For International Economics shows the current American tariff rate on Chinese imports at 57.6%, while China taxes American products at 32.6%.
