{"id":229079,"date":"2025-10-21T10:07:07","date_gmt":"2025-10-21T10:07:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/229079\/"},"modified":"2025-10-21T10:07:07","modified_gmt":"2025-10-21T10:07:07","slug":"canadian-cabinet-and-furniture-makers-warn-of-blood-bath-as-trump-tariffs-bite","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/229079\/","title":{"rendered":"Canadian cabinet and furniture makers warn of \u2018blood bath\u2019 as Trump tariffs bite"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Canadian companies that sell cabinets and furniture to the U.S. are now grappling with new tariffs that are set to increase in January.Nick Iwanyshyn\/The Globe and Mail<\/p>\n

Alain Ouzilleau, owner and president of Groupe Cabico Inc., spent millions of dollars in recent years upgrading his two factories in Quebec and Ontario into state-of-the-art facilities shipping around $100-million worth of high-end kitchen cabinets to the United States each year.<\/p>\n

Almost overnight, that business has been thrown into jeopardy.<\/p>\n

Last Tuesday, U.S. President Donald Trump<\/a> imposed 25-per-cent tariffs<\/a> on imports of kitchen cabinets, vanities and upholstered furniture, alongside a 10-per-cent tariff on lumber. The levies will increase to 50 per cent for cabinets and vanities and 30 per cent for upholstery in January, the Trump administration says.<\/p>\n

\u201cWe have very long-term loyal customers,\u201d Mr. Ouzilleau said in an interview. \u201cBut the 50 per cent that is planned to be effective January 1st is just a death sentence.\u201d<\/p>\n

Trump signs proclamation for 25 per cent tariff on trucks, with USMCA exemption<\/a><\/p>\n

Cabico, which employs around 550 people in Coaticook, Que., and St. Catharines, Ont., and typically sends around 90 per cent of its product south across the border, is particularly exposed to the new U.S. levies. But hundreds of other Canadian cabinet and furniture makers also stand to lose their key export business, with limited ability to expand in a crowded domestic market.<\/p>\n

This has sent shock waves through both industries, which are already struggling with a flood of cheap imports from Asia and weak demand at home owing to the sluggish housing market. <\/p>\n

The tariffs, imposed as part of the Trump administration\u2019s \u201cnational security\u201d investigation into forest products, are part of a growing list of Section 232 tariffs applied to specific industries rather than individual countries.<\/p>\n

What started as tariffs on steel, aluminum and automobiles has expanded to include copper and lumber, with a tariff on heavy trucks slated to come into force in November. The Trump administration is also conducting investigations into aircraft, semiconductors and industrial machinery, among other industries, suggesting more tariffs are on the horizon. <\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Employees work on custom cabinetry at Cabico’s factory in St. Catharines, Ont. The company usually sells around 90 per cent of what it makes to the U.S.Nick Iwanyshyn\/The Globe and Mail<\/p>\n

Compared to many of the other targeted sectors, the kitchen cabinet and upholstery industries in Canada are relatively small and domestically oriented. Canada sent around US$390-million worth upholstered furniture and around US$430-million worth of kitchen cabinets to the United States in 2024, according to U.S. customs data.<\/p>\n

Nonetheless, the industries employ tens of thousands of people across the country. And while only around one-fifth of Canadian-made kitchen cabinets are exported, the loss of export sales will ripple through the whole industry, said Luke Elias, president of Muskoka Cabinet Co. Inc. and vice-president of the Canadian Kitchen Cabinet Association.<\/p>\n

\u201cA lot of the major players have invested in robotics and automation, and they\u2019re just not going to go quietly. They will turn inward. I think it\u2019s going to be a blood bath\u201a\u201d Mr. Elias said, adding that smaller companies will struggle to maintain their market share. <\/p>\n

Mr. Ouzilleau of Cabico is trying to maintain his relationships with U.S. buyers as long as he can. For contracts that were signed before the tariffs came into force last week, Cabico is absorbing the full 25-per-cent tariff. Going forward, he plans to split the tariff cost with buyers, with each paying 12.5 per cent. <\/p>\n

That could work with the current 25-per-cent tariff, but not the 50-per-cent tariff planned for January, he said. <\/p>\n

\u201cWe will never stop fighting and we\u2019ll continue to find solutions. But yes, the only solution right now we\u2019re looking at is we will keep downsizing as much as we have to as the U.S. market is just slipping under our feet,\u201d he said.<\/p>\n

\u201cI certainly don\u2019t want our employees to get panicked and make the wrong decisions,\u201d he added. \u201cAt the same time, I want the government to understand that this is really, really serious. We\u2019re not screaming wolf here.\u201d<\/p>\n

Canadian softwood producers brace for impact from new U.S. tariffs<\/a><\/p>\n

A similar dynamic is playing out in the upholstered furniture industry, said Daniel Walker, owner of Jaymar, a Terrebonne, Que.-based manufacturer that sends around 10 per cent of its production to the U.S. <\/p>\n

Mr. Walker has been calling all of his U.S. customers and trying to come up with cost-sharing arrangements or promotions. \u201cI\u2019ll lose money for sure, and I\u2019ll lose some footprint and people are just very upset there,\u201d he said. <\/p>\n

\u201cWe\u2019ll see what the exchange rate does. I can absorb maybe a little bit. But at the end of the day, I need to pass on the 25 per cent,\u201d he said. <\/p>\n

Mr. Walker has already put his 150 employees on shorter hours and is tapping the federal government\u2019s \u201cwork sharing\u201d program, which uses employment insurance to cover the lost hours without the employee being laid off. <\/p>\n

So far, Mr. Trump\u2019s furniture tariffs only apply to upholstery, which accounts for around a fifth of Canadian furniture production. But the executive order implementing the tariffs includes a process by which other types of furniture can be added to the tariff list at the request of U.S. companies. <\/p>\n

This happened with steel and aluminum, where the number of \u201cderivative\u201d products subject to the tariffs has ballooned in recent months. <\/p>\n

\u201cThe fear is that other categories will be added as time goes by. That\u2019s a big threat that we have right now. And that\u2019s what everybody thinks,\u201d said Gilles Pelletier, chief executive of the Quebec Furniture Manufacturers Association. <\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Canadian companies are working to keep their U.S. clients after President Donald Trump imposed tariffs on imports of kitchen cabinets, vanities and upholstered furniture.SAUL LOEB\/AFP\/Getty Images<\/p>\n

Several furniture makers have already packed it in this year, even before the prospect of specific furniture tariffs were floated in late summer. In March, Prepac Manufacturing Ltd. said it was shuttering its plant<\/a> in Delta, B.C., laying off 170 workers and relocating its operations to North Carolina. In June, Dorel Industries Inc. announced it was closing its furniture plant in Cornwall, Ont., and laying off more than 300 employees.<\/p>\n

Representatives of both the cabinet and furniture industries are calling for more help from Ottawa, starting with increased protection from low-cost products from China and Vietnam, which they say are being dumped in Canada. This is what happened in the steel industry, where Ottawa responded to U.S. tariffs by imposing restrictions on third countries to shore up the domestic industry. <\/p>\n

In fact, a number of Canadian cabinet and furniture makers, though they wish the country was exempt from these tariffs, said Mr. Trump is doing the right thing in trying to protect the U.S. industry from cheap Asian imports, and they want Ottawa to follow suit.<\/p>\n

\u201cI don\u2019t want to jeopardize the relationship with the U.S. right now. Who\u2019s importing from U.S.? La-Z-Boy. They\u2019re a nice company,\u201d said Mr. Walker. The problem for the Canadian market isn\u2019t U.S. goods, he said, \u201cit\u2019s China, Vietnam.\u201d<\/p>\n

U.S. automakers on track to pay $10-billion in tariffs by end of October<\/a><\/p>\n

Whether Canadian consumers would be willing to forgo cheap furniture and kitchen cabinets to support the domestic industry is another question. The latest Bank of Canada quarterly consumer survey<\/a>, published Monday, found that people are keen to Buy Canadian. But three-quarters said they\u2019re not willing to pay more than an additional 10 per cent for a made-in-Canada product. <\/p>\n

Alongside increased protection, Mr. Elias of the Canadian Kitchen Cabinet Association wants to see the government\u2019s new Buy Canadian procurement rules, which require companies bidding on government-backed projects to use Canadian steel and lumber, extended to cabinets. <\/p>\n

Marie-France Faucher, a spokesperson with the Department of Finance, said in an email that Public Services and Procurement Canada has just launched consultations for the Buy Canadian policy and encouraged cabinet makers to participate. She also said that companies affected by tariffs can apply for loans of up to $5-million from the Business Development Bank of Canada to deal with cash flow problems or help pivot to new markets.<\/p>\n

Still, Mr. Elias worries that his industry will be ignored by Ottawa.<\/p>\n

\u201cWe\u2019re a significant industry. There\u2019s a kitchen in every house across the country. But because we\u2019re spread amongst 3,700 companies, and not just three, like the automobile industry \u2013 or four, whatever it is \u2013 we don\u2019t get heard,\u201d he said. <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Canadian companies that sell cabinets and furniture to the U.S. are now grappling…\n","protected":false},"author":2,"featured_media":229080,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,8400,46],"class_list":{"0":"post-229079","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-e-ny","12":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/229079","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=229079"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/229079\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/229080"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=229079"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=229079"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=229079"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}