In this articleRHWSMWFollow your favorite stocksCREATE FREE ACCOUNTPresident Donald Trump’s so-called “reciprocal tariffs” could be struck down by the U.S. Supreme Court as soon as this week. Regardless of the ruling, there’s little comfort to be found for the furniture industry. Furniture importers are facing steep, and in some cases stacking, import duties after the industry was hit with higher tariffs on items such as couches, kitchen cabinets and vanities last fall under section 232 of the Trade Expansion Act.While Trump’s country-specific “liberation day” tariffs imposed under the International Emergency Economic Powers Act and announced in April are under review by the nation’s highest court, the duties specific to furniture importers, of around 25%, are not. Compounding the issue is a constant thread of uncertainty plaguing the industry, said Peter Theran, CEO of the Home Furnishings Association, the trade group representing furniture retailers. The 25% duty on certain furniture imports was supposed to rise to 50% in January, but at the end of December, that plan was pushed back to 2027. Its also become common over the past year for Trump to threaten new tariffs on various imports that never end up getting enacted.”This is a very, very difficult time to manage your business,” said Theran. “The No. 1 driver of the difficulty of managing your business is unpredictability and an inability to make alternative plans and invest in those plans, because you don’t know what tomorrow will be.” [embedded content]Rising distressTariffs and the uncertainty they’ve brought are the latest blow to the furniture industry, which has been struggling for the past four years and was under pressure well before Trump’s trade war. During the Covid-19 pandemic, when people were stuck at home and flush with cash, many Americans took the opportunity to refresh their spaces and buy new furniture and decor. Then, low interest rates brought a surge in demand for new homes, which served as a catalyst for furniture buying. The result was outsized growth across the home goods industry and boom times for furniture. But as inflation and interest rates began to creep up in 2022, the sector started to sputter, and it later declined for the first time in at least seven years, according to data from Euromonitor. [embedded content]By the time tariffs came around, home sales had slowed and some furniture companies were already struggling to keep operations afloat and couldn’t manage the sudden increase in fixed costs. American Signature Furniture, the parent company behind Value City Furniture, declared bankruptcy late last year after nearly 80 years in business. It began liquidation sales at its 89 remaining stores last month. In a court filing, the company said the aftermath of the Covid pandemic, subsequent shifts in consumer spending and rising costs led to a 27% decline in sales between 2023 and 2025. Net operating losses ballooned from $18 million to $70 million during the same time period, it said. By the end of 2024, the company was facing “significant liquidity constraints,” which were then “further exacerbated and accelerated by the introduction of new tariff policies,” the company said in the filing. Over the last year, at least 10 other furniture businesses have declared bankruptcy, with some liquidating and ceasing operations altogether, according to a CNBC review of federal bankruptcy filings. Most of the companies are smaller businesses, which have been hit harder by tariffs because they have fewer resources than their larger competitors.”The smaller players are definitely the ones that will be the hardest hit because they don’t necessarily have deep pockets, they don’t have the economies of scale, they don’t have the huge sourcing teams that can suddenly look to pivot the destination or the origin of the products,” said Neil Saunders, retail analyst and managing director at GlobalData. “So they are under a lot of pressure, and we probably will see more failures in that independent space.” Joseph Cozza, whose small furniture business East Coast Innovators supplies retailers such as Macy’s and Raymour & Flanigan, told CNBC he was forced to raise prices between 15% and 18% to offset higher tariff costs, leading to a slide in demand over the holidays. For now, Cozza said he can keep his business running but is hoping for an interest rate cut, a jolt to the housing market and larger-than-expected tax returns to spur sales. “I’m praying for that,” he said. If not, he might have to move his business from Philadelphia to North Carolina, where operating costs are lower, he said. “I have a nice company with nice employees, and I pay them all a really good wage, and I’m being penalized,” said Cozza. …
