New tariffs will mean price hikes on some upholstered furniture

VANCOUVER -

Get ready for some sticker shock if you’re in the market for a new couch. Because of new tariffs on upholstered furniture made in China and Vietnam, some prices are going through the roof.

In May, heavy new tariffs were slapped on after those countries were accused of dumping their cheaper, government-subsidized leather furniture onto the Canadian market. The move is intended to protect Canadian furniture manufacturers but could end up hurting consumers.

At Moe’s Home Collection in Vancouver, co-CEO Sara Samieian and her team pivoted before the new tariffs came into effect on May 5, building relationships with manufacturers in Mexico, Malaysia and South America in an effort to secure affordable leather and fabric product.

“A lot of retailers maybe weren’t prepared, so they had shipments arriving at port and they got hit with that tariff that same day,” she says.

With the tariffs hitting nearly 300 per cent, retailers will have to pass the cost on to their customers.

“The people who are going to be most affected are the consumers,” Samieian says. “They’re going to have to be all of a sudden seeing price increases – double, triple from what they were paying a month ago.”

James Brander, a professor at UBC’s Sauder School of Business, says the change has been in the works for a long time.

“Canadian producers, they complain,” Brander said. “They say, ‘Hey look, this is unfair. These foreign imports are coming in, they’re getting subsidized, it’s not fair.’”

The new tariffs will be reviewed in August, and he says in the meantime there may be exemptions for some importers. But in the long run, everyone will have to adjust, as the tariffs are here to stay. Canadian manufacturers could be swamped with orders, and that would mean their product gets more expensive too.

“They could double their prices in the short run,” Brander says.

If you’re looking to buy a couch – the time to do it is now, before the prices jump. Moe’s still has old product from China and Vietnam on the floor but once it’s sold, they won’t restock. One of their leather sectionals that made it in before the tariffs came in is currently $14,000. If it had arrived after the tariffs were in place?

“It would probably be over $30,000,” Samieian says.