White House delays new tariffs on furniture, kitchen cabinets and vanities
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(WASHINGTON) In the latest reversal of his signature economic policy, President Donald Trump is rolling back tariffs on furniture, kitchen cabinets and vanities.
Higher tariff rates on those goods that were set to take effect Jan. 1 will now be delayed for another year, according to a White House fact sheet.
In October, the White House imposed a 25% tariff on upholstered furniture, kitchen cabinets and vanities. Rates for cabinets and vanities were set to go up to 50% in 2026, while upholstered wooden furniture — like sofas or chairs — were set to increase to 30%.
This move means that, for now, the 25% tariff stays in effect on all those goods until at least Jan. 1, 2027.
The White House cited “productive negotiations with trade partners to address trade reciprocity and national security concerns with respect to imports of wood products.”
Furniture prices have already been going up — the latest inflation report shows living room, kitchen and dining room furniture prices increased 4.6% in November compared to one year ago.
When the White House first announced the tariffs, stocks of companies that import furniture from overseas like Restoration Hardware, Wayfair and Williams Sonoma traded lower.
Amid many households’ concerns about affordability and rising prices, President Trump has already rolled back tariffs on more than 200 foods like coffee and bananas.
(NEW YORK) — With new tariffs taking effect Tuesday on furniture and lumber, an analysis released by Goldman Sachs finds American consumers are paying for more than half of the cost of the levies imposed by President Donald Trump.
In a research note to its clients, the global investment and banking giant said U.S. consumers will absorb 55% of tariff costs by the end of this year. American businesses would pay 22% of the costs, foreign exporters would absorb 18% and 5% would be evaded, according to the Goldman Sachs analysis.
Consumers could end up paying 70% of the cost by the end of next year, the report said.
“At the moment, however, U.S. businesses are likely bearing a larger share of the costs because some tariffs have just gone into effect and it takes time to raise prices on consumers and negotiate lower import prices with foreign suppliers,” the analysis adds.
In a statement to ABC News, White House spokesperson Kush Desai said, “Americans may face a transition period from tariffs,” but insisted “the cost of tariffs will ultimately be borne by foreign exporters.”
“Companies are already shifting and diversifying their supply chains in response to tariffs, including by onshoring production to the United States,” Desai said. “Americans can rest assured that the Administration will continue to deliver economic relief from Joe Biden’s inflation crisis while laying the groundwork for a long-term restoration of American Greatness.”
The Yale Budget Lab reported on Sept. 26 that U.S. consumers face an overall average effective tariff rate of 17.9% – the highest since 1934.
In August, Trump blasted Goldman Sachs’ CEO David Solomon and the firm’s economists after they put out a report saying consumers will absorb tariff costs.
The new Goldman analysis, which was released on Sunday, does not take into account Trump’s latest threat to impose additional 100% tariffs on Chinese imports set to take effect on Nov. 1.
And on Tuesday, new tariffs kick in at midnight. Timber and lumber imports will face an additional 10% tariff.
Home-building costs have also been soaring and are expected to climb higher with the new tariffs on lumber. A UBS report said the new tariffs on wood products could add another $1,000 to the average cost of building a home, on top of the $8,000 in tariff costs home builders have already seen this year.
Kitchen cabinets and upholstered furniture will face new 25% tariffs. Homebuilders and some furniture companies have warned that those higher costs could mean higher prices for consumers.
Other domestic furniture makers have celebrated the new tariffs.
“These factories are the most likely to see increased demand for their domestically-produced products, because imported upholstered furniture that was previously in the same price range now will be subject to the new tariffs,” the American Home Furnishings Alliance said in a statement to ABC News.
The U.S. imported $25.5 billion in furniture in 2024, up 7% from the previous year, according to trade outlet Furniture Today. Vietnam and China accounted for roughly 60% of the imports, the report found.
In recent months, Trump has placed country-specific tariffs on the top furniture exporters. Products from Vietnam face a 20% tariff, for instance, while Chinese imports encounter a 30% levy.
The overall price of furniture has gone up 4.7% since August 2024, according to the Bureau of Labor Statistics. Prices for living room and dining room furniture have climbed 9.5%, according to the Bureau of Labor Statistics.
Furniture prices soared 1.4% over three months ending in June, when compared to the previous three-month period, the government’s personal consumption expenditure index shows.
“This is a big jump,” Jason Miller, a professor of supply chain management at Michigan State University, told ABC News in an August interview, noting the index had largely declined between the mid-1990s and the mid-2010s. “It’s difficult to see many positives from a consumer standpoint at the moment.”
(NEW YORK) — A long-awaited jobs report to be released on Thursday will offer the latest look at the health of the labor market at a fraught moment for the U.S. economy.
Hiring slowed sharply over the summer, before a government shutdown paused the release of gold-standard federal data for weeks on end. A stock market selloff over recent days underscored the uncertainty looming over the economy as some investors warn of an AI bubble.
Economists expect the U.S. to have added 50,000 jobs in September, which would mark an acceleration from 22,000 jobs added in August, according to a Morningstar analysis of FactSet data.
Still, the anticipated figure would come in well below an average of 97,000 jobs added over the first six months of this year.
Mass layoffs at corporate giants like Amazon, UPS and Verizon in recent weeks have drawn attention to a sluggish labor market — and stoked fears that job losses may spread.
It is likely too early to panic, however, some economists previously told ABC News. While the layoffs reflect a weakened labor market and AI adoption in some corners of the tech industry, they added, the prospect of wider job losses remains highly uncertain.
Inflation has picked up in recent months while hiring has slowed, posing a risk of an economic double-whammy known as “stagflation.”
Those economic conditions have put the Federal Reserve in a bind, since the central bank must balance a dual mandate to keep inflation under control and maximize employment.
“We have the situation where the risks are to the upside for inflation and to the downside for employment. We have one tool,” Fed Chair Jerome Powell said at a press conference in Washington, D.C., last month. “You can’t address both of those at once.”
Still, Powell said, concern has tilted toward strain in the labor market, prompting the central bank to reduce interest rates a quarter of a percentage point at each of its last two meetings.
“A further reduction of the policy rate in December is not a foregone conclusion — in fact, far from it,” Powell told reporters.
Traders peg the chances interest rates will be left unchanged next month at about 66%, while the odds of a quarter-point rate cut stand at 33%, according to the CME FedWatch Tool, a measure of market sentiment.
On Wednesday, the Bureau of Labor Statistics (BLS) said it would not release a full jobs report for the month of October due to lost capacity during the shutdown. Rather, partial jobs data for October will be released as part of the November report, the BLS said.
(NEW YORK) — Online shoppers set a record high on Thanksgiving, paving the way for gangbusters performance on Black Friday, Adobe data showed.
Digital spending on Thanksgiving jumped 5% from a year earlier, totaling $6.4 billion and exceeding Adobe’s expectations, the firm said.
The company also expects Black Friday shoppers to set a new record, outpacing last year’s total by more than 8%.
Adobe attributed the strong performance on Thanksgiving to better-than-anticipated discounts, especially for electronics. Discounts also touched an array of products from furniture to appliances to toys.
“Given the strength of Thanksgiving deals, Adobe is adjusting its discount forecast for the big shopping days coming up,” Adobe said in a statement to ABC News. “Deals are now expected to be on par with the elevated levels seen in the last holiday shopping season.”
A surge in the popularity of AI retail assistants also contributed to the nationwide shopping spree, Adobe said. AI-driven traffic to online sellers soared 725% compared to last year, the firm said, stemming primarily from chatbots designed to aid consumers.
Shoppers who arrived at a retail website from an AI service were 54% more likely to make a purchase than those who did not, Adobe said.
“The magnitude of discounts was the big story on Thanksgiving yesterday, as retailers leaned into delivering great deals to drive consumer demand online,” Vivek Pandya, lead analyst at Adobe Digital Insights, told ABC News in a statement.
“This was further propped up by impulse-led mobile shopping and the use of generative AI which assisted shoppers in locating the best deals, two trends that helped deliver higher-than-expected overall spend on Thanksgiving,” Pandya added.
The early returns for the holiday shopping season arrive at a wobbly moment for the U.S. economy.
Inflation has picked up in recent months, putting price increases a full percentage point above the Fed’s target of 2%. Meanwhile, hiring has slowed, posing a risk of an economic double-whammy known as “stagflation.”
Alongside those headwinds, consumer spending among middle- and low-income Americans has slowed, triggering warnings from restaurant giants such as McDonald’s and Chipotle. A report this month showed consumer sentiment has fallen to its lowest point since a peak of pandemic-era inflation in 2022, University of Michigan data showed.
Retailers hope shoppers defy these trends over the holiday season, when spending typically surges. The outcome could hold significant stakes for the wider economy, since consumer spending accounts for about two-thirds of U.S. economic activity.
