Rising tariffs push furniture brands to boost US manufacturing

“We were already set up with a lot of American factories on our upholstery anyway, and we’re leaning into that more by looking at what could be made in America,” she said.

This month, new tariffs on cabinets, furniture and lumber went into effect as part of President Donald Trump’s ongoing changes to U.S. trade policy. This includes a 25% tariff on upholstered furniture that will go up to 30% come 2026 — on top of existing China-specific tariffs, and without exemptions for imports from Canada and Mexico. Kitchen cabinets, bathroom vanities and “associated products” are subject to a 50% tariff.

For furniture businesses that import products, the increased costs leave them with few options, none of which are particularly desirable: allow tariffs to eat margins, pass along higher costs to consumers or try to find supply chain alternatives.

As Sugarman from Lulu and Georgia said, North Carolina has long been a hub for furniture and upholstery manufacturing. Many U.S. businesses — like Ashley Furniture, Bassett Furniture, and Thomasville Furniture —  already make much of their furniture there. But other companies, such as hidden door and cabinetry brand Murphy Door, are using this time to build out their own infrastructure.

Jeremy Barker, CEO at Murphy Door, said most of its materials come from Oregon, Louisiana, Washington or Montana. Its products are built in manufacturing hubs in Utah and Kentucky. But this fall, it’s starting to build out a new manufacturing plant in Dallas. Barker said it will cost about $7 million to retrofit a 100,000-square-foot warehouse with the equipment needed to make its products.

To help offset the costs of running a new facility, Murphy Door is leasing some of its space to its lumbar supplier, Sierra Forest Products. This helps offset operational costs for the facility itself and means that Murphy Door can access materials on demand.

“We take the material off their floor and won’t get charged for it until the day we use it,” he said. “Basically, their [lease] covers my mortgage. And not only that, it really streamlines keeping payables in line with output.”

From a consumer perspective, Barker said he doesn’t think the “made in USA” label adds much to his top line. The customer, he said, wants “what they want, when they want it, and to be able to fully customize it.”

But he does find that having a U.S.-based supply chain helps ensure fast customization and quick shipping, and allows the company to avoid global shipping bottlenecks like those that happened during the Covid-19 pandemic. “Everything is here, made by us, for us, right now, and it can flow,” he said. Murphy Door, which did $28 million in sales last year, is forecasting 70% growth for the year.

But not all companies are able to pivot in such fashion. Barker has another company, Murphy Ladder, that imports products from China and is facing several millions of dollars in tariff losses. He said even if he wanted to invest in a facility to make the products, it wouldn’t be possible because of certain EPA regulations on manufacturing aluminum.

“Even though they want all the manufacturing in the United States, the EPA is not friendly to certain products,” Barker said. “You’re kind of wanting to slap us on both sides of the cheek.”

Sugarman at Lulu and Georgia is also keeping some production overseas. Handwoven rugs from India are a centerpiece of Lulu and Georgia’s offerings, and Sugarman said her company is committed to continuing supplier relationships despite the 50% reciprocal tariffs on imports from India.

“That’s an industry that’s generational, and you’re not moving that production to America,” she said. “I think the consumer demand is there, and we want to support our factories there and make sure they’re sustaining the business. We’re not canceling orders, or ordering less. … Once you lose those weavers in India, they don’t come back.”

But it requires a nimble team to make the math work. Moving other products to her North Carolina suppliers helps offset the tariff costs for the imports. Lulu and George is seeing 30% year-over-year growth with a 52% repeat customer rate, and the growing revenue stream is helping the company navigate the new costs and an uncertain consumer environment.