Danielle Kaye Jean Lin, owner of Colony, focused her shop on US Made products. Yet she’s now going through a double whammy of declining sales as the impact of new tariffs starts to affect their bottom lines. The unpredictable nature of these tariffs has had Jean Lin worried that her business’s days are numbered. She works with a mill worker, based in the US, who imports these materials, which are growing scarce and rising in cost, tightening her margins.
“It’s really hard to invest in anything when there’s unknowns, especially works of great value or works that are going to go in your home for a long time,” Jean Lin expressed regarding the current economic climate. She described the situation as “not business-ending, but not healthy, either,” highlighting the struggle many retailers face as they navigate these challenging times.
In Hopatcong, New Jersey, newcomer Anthony Cabrera just brought his new house through the door after a long wait through this winter. Apple as he rushed to furnish his new digs. He told us he could not escape the fear that the new tariffs would raise prices on many materials used in home construction and decoration. “Tariffs were definitely on my mind throughout the whole process,” Cabrera noted, emphasizing the pervasive concern among homeowners and builders alike.
New US tariffs have recently expanded to include many items that are essential to home renovation. This places imported kitchen cabinets, timber and wooden furniture under the proposed rule. Economists caution that these tariffs would raise prices even more nationwide. Matthew Walsh, a housing economist at Moody’s Analytics, thinks that these home building tariffs will introduce a lot of cost uncertainty. This doubt will be the short-term effect we witness most acutely.
Energy watchdog Buddy Hughes, the chairman of the National Association of Home Builders, said he was disappointed. He is particularly concerned about the implications for building affordable housing. He was right to note that the apocalypse is not descending on the home builders. It does pose big hurdles as they continue to struggle in the wake of rapidly skyrocketing material costs.
The tariffs are largely responsible for a shocking 50% increase in steel and copper imports. For builders that use materials such as copper piping, the battle is growing steeper. Industry leaders are starting to sense the pressure. RH, formerly known as Restoration Hardware, believes that it will face $30 million in increased tariff costs during the second half of this year. Just as our own IKEA has said that these tariffs will force the company to increase prices in their products.
Michael Trubrig, another retailer connected to Colony, has similarly wrestled with pricing decisions when the costs have gone up and down. “We had to raise prices because we couldn’t lower the margin,” Trubrig explained. His sentiments reflect a broader trend among retailers who find themselves caught between maintaining product quality and absorbing rising expenses.
Elena Patel, co-director of the Urban-Brookings Tax Policy Center, surfed in on a timely story. Without those, she cautioned, the construction of affordable housing will be where the new tariffs hit hardest. Businesses are under even greater economic duress. This means that many are forced to reconsider their pricing structures and marketing tactics moving forward.
Cabrera’s story is illustrative of the frustration many would-be homeowners and builders are facing now. “It was a concern every morning looking at prices, trying to figure out how to control the budget that kept increasing,” he admitted, illustrating the difficulties faced in planning home improvement projects amidst economic unpredictability.
As the story develops, advocates from every sector are still leery of future investments linked to housing and refurbishment efforts. The other major factor – the widespread fear of tariffs – still hangs over both retailers and consumers.
