Canadian Furniture And Cabinet Industry In Crisis

According to the Canadian Kitchen Cabinet Association, although the more significant tariffs that were to take effect on January 1 have been blocked, the 25 percent tariff imposed in October has already had a devastating impact on the industry. While the 50 percent tariff is a relief, the 25 percent duty has already broken the industry’s back, says Luc Elias, vice president of the association. According to him, such a large increase in the manufacturing environment cannot be tolerated or adjusted immediately. The kitchen cabinet industry in Canada is worth about $4.7 billion and the sector exports $600 million worth of products to the United States annually.
Elias said that the US tariffs have been imposed at a time when Canada’s housing market is already slowing, which has doubled the difficulties. He says the measures have proven to be another blow to an industry that was already under pressure. Manitoba-based company Elias Woodwork is a clear example of this situation. The company employs more than 400 people and exports about 80 percent of its products to the United States. Ralph Fehr, the company’s president, said a 25 percent tariff is harmful, but a 50 percent duty would be a complete disaster. According to him, no buyer in the United States would be willing to pay such a high premium for Canadian products.
Fehr said his company uses American raw materials, such as Appalachian hardwood, converts them into finished products in Canada and then sells them in the United States. He said the Canadian government encouraged exports to the United States for decades, and they built their business on that model for 45 years. Now they are hoping the federal government will try to find a solution for them with the United States. According to Fehr, the tariff has wiped out almost all of their profits, and now the company is forced to cut costs and make the system more efficient to try to get out of this crisis.
The Canadian Kitchen Cabinet Association says jobs have been falling since the tariffs were imposed in October. Several companies warned at industry meetings in December that more layoffs were imminent. According to Luc Elias, the situation is dire and the industry is truly going through “extremely difficult times.” Elias called for the furniture and cabinet industry not to be left out of the upcoming review of the Canada-U.S. trade agreement, CUSMA. He says that while the federal government’s **Build Canada** policies have helped some, they should be extended to all government and provincial construction incentives.
He also expressed concern about parts imported from Asia at low prices, which are being assembled in Canada and sold in the United States with the label “Made in Canada”. According to him, this practice is harming not only the American but also the Canadian industry. The representative organization of the American cabinet industry alleges that after the US sanctions imposed on Chinese products, China has changed its course and is using Canada and Mexico as a “side door”. According to US officials, efforts are being made to further tighten the Rules of Origin in CUSMA to stop this trend.

President Trump argues that tariffs on furniture are necessary to strengthen American industry and protect national security. However, Canadian industry fears that the upcoming CUSMA negotiations will be extremely tense, especially since Trump has already threatened to withdraw from the agreement. According to Luc Elias, **3,500 companies** and **more than 25,000 employees** in Canada are currently affected by the crisis, but this industry is receiving little attention. He said, “Kitchen cabinets are rarely mentioned, even though they are a part of every home.”