Trump tariffs on timber, furniture take effect

The latest salvo features a 10-percent tariff on imports of softwood lumber, while duties on certain upholstered furniture and kitchen cabinets start at 25 percent.

Come January 1, the rate on imported upholstered furniture is set to rise to 30 percent, while those on kitchen cabinets and vanities will jump to 50 percent.

But duties on wood products from Britain will not exceed 10 percent, and those from the European Union and Japan face a 15-percent ceiling. 

All three trading partners have reached deals with the Trump administration to avert harsher duties.

But the new tariffs will "create additional headwinds for an already challenged housing market by further raising construction and renovation costs," warned National Association of Home Builders (NAHB) chairman Buddy Hughes.

US home sales have been gloomy in recent years with high mortgage rates and limited inventory pushing costs up for buyers.

In imposing the latest duties, Trump said the Commerce Secretary found that "wood products are used in critical functions of the Department of War, including building infrastructure for operational testing."

Trump's proclamation added that US wood production "remains underdeveloped," leaving the country import-dependent.

But NAHB's Hughes said: "Imposing these tariffs under a 'national security' pretext ignores the importance housing plays to the physical and economic security of all Americans."

He urged for deals that instead "roll back tariffs on building materials."

- Canada, Vietnam hit? -

Canada, the top supplier of lumber to the United States, is set to be impacted.

The 10-percent lumber tariff stacks on anti-dumping and countervailing duties the country faces, and the United States recently more than doubled these to 35 percent.

This means that Trump's latest action brings duties on Canadian lumber to 45 percent.

The BC Lumber Trade Council, which represents British Columbian lumber producers in Canada on trade matters, in September called the new tariffs "misguided and unnecessary."

"This will impose needless strain on the North American market, threaten jobs on both sides of the border, and make it harder to address the housing supply crisis in the United States," the council added.

Stephen Brown of Capital Economics told AFP that with 30 percent of lumber sourced from abroad, a 10-percent tariff could raise the cost of building an average home by $2,200.

Brown added that China, Vietnam and Mexico account for the bulk of US furniture imports.

"The US gets 27 percent of its furniture imports from China and then almost 20 percent from both Vietnam and Mexico," he told AFP.

He expects Vietnam could face the biggest impact "as furniture makes up 10 percent of its exports to the US."

The corresponding figures are smaller at four percent for China and 2.5 percent for Mexico.

The tariffs were imposed under Section 232 of the Trade Expansion Act of 1962, the same authority Trump used to roll out steel, aluminum and auto duties this year.

Products subject to sector-specific tariffs are not doubly hit by countrywide levels that Trump has separately imposed, which are in some cases higher.

bys/dw