Nailed by tariffs, caught in confusion: Singapore’s furniture firms brace for impact

[SINGAPORE] The Trump administration’s newly announced tariffs on furniture imports have left industry players grappling with uncertainty, with many questions still unanswered.

One key ambiguity is whether the new tariffs are on top of existing reciprocal tariff rates, or if only the higher rate applies, said Ernie Koh, executive director of Singapore-listed furniture maker Koda.

US President Donald Trump’s unpredictable style could also mean sudden changes, as seen in April when reprieves were granted shortly after reciprocal tariffs were announced. This possibility still looms, Koh noted.

“Next week, he could give a 90-day reprieve,” he said.

On Thursday (Sep 25), Trump announced a 50 per cent tariff on kitchen cabinets, bathroom vanities and related products, and a 30 per cent tariff on upholstered furniture, effective Oct 1.

These come on top of a 100 per cent tariff on branded or patented pharmaceuticals – with exceptions for companies building plants in the US – and a 25 per cent tariff on heavy trucks, also effective the same day.

Singapore’s Deputy Prime Minister (DPM) Gan Kim Yong, speaking to reporters on Saturday in response to the tariffs, said the government is reaching out to affected furniture exporters to discuss how it can “move forward and support them, and to help them if necessary”.

Support will include the Business Adaptation Grant, to be launched by October and capped at S$100,000 per company to help businesses adjust to the tariff environment. More details on the scheme will be released in a fortnight.

“We are prepared to do more, if necessary, to help companies weather this transition,” DPM Gan said.

US demand at stake

The US was the world’s largest consumer of upholstered furniture in 2024, with a market value of US$21.2 billion, indicated a June 2025 report from Milan-based research institute CSIL.

Imports made up 42 per cent, or US$8.9 billion, with Vietnam (39 per cent), China (30 per cent) and Mexico (11 per cent) as the main suppliers.

For Koda, which manufactures in Malaysia and Vietnam, the new tariffs could mean rates of 49 per cent and 50 per cent, respectively, if applied on top of existing reciprocal tariffs. If only the higher rate applies, the tariff would be 30 per cent. Koda does not manufacture kitchen cabinets or bathroom vanities.

Malaysia has a reciprocal tariff rate of 19 per cent, Vietnam 20 per cent, and Singapore the baseline of 10 per cent.

The difference between 30 per cent and nearly 50 per cent tariffs could determine whether customers cancel orders, Koh said.

“If it’s just 30 per cent, I don’t think they will cancel (orders); they may ask for discounts from us, so that we share in the tariff (costs),” he explained. “But this does mean our margins will be affected.”

“But if it’s 50 per cent, I will expect some cancellations,” he added. “Or, customers will want me to give them more discounts – I have to see if it’s worth giving the discount, or if we should just cancel on our end.”

At a 50 per cent tariff, US consumers could face price increases of 7 to 8 per cent, Koh estimated. While this may dampen demand, he hoped the US Federal Reserve’s recent and upcoming rate cuts could spur consumption.

The silver lining for Koda is that less than 5 per cent of its US exports are directly hit by the tariffs, even though the US accounts for 70 per cent of its sales. Its main exports – dining tables, bedroom cabinets and coffee tables – are outside the tariff scope.

“The new tariffs will not kill me,” said Koh. “We just have to manage it.”

‘Modest’ exposure

For furniture maker HomesToLife, its direct exposure to the US market is “modest” at 7.7 per cent of H1 2025 revenue, with Europe and Asia-Pacific accounting for 88 per cent, said group chief executive officer Phua Mei Ming.

The Singapore-based, Nasdaq-listed company expects the impact on pricing and volumes to remain “contained”.

“Our broad customer base across Europe and Asia-Pacific provides resilience against potential shifts in US competitiveness,” Phua said. For Singapore’s furniture industry, the bigger risks lie with smaller players that rely more heavily on the US market, she added.

Singapore Manufacturing Federation president Lennon Tan said the uncertainty over tariff rates is a major concern for the sector.

Still, he noted that furniture makers are better placed to absorb higher costs than some other industries.

“They are more resistant in their pricing because furniture margins, comparatively, are higher, so the ability to absorb is more,” he explained.