THE EUROPEAN FURNITURE INDUSTRY CONFEDERATION (EFIC) IS CONCERNED ABOUT POTENTIAL NEW TARIFFS FOR EU FURNITURE EXPORTS TO THE US

Dear President von der Leyen, 

President Trump announced on 23 August a major tariff investigation on Furniture coming into the United States. According to the statement, ‘within 50 days the investigation will be completed and furniture coming from other countries into the US will be tariffed at a rate yet to be determined. This would bring furniture business back to the US.’ 

On Thursday 21 August, the EU and the US agreed on a Framework on an Agreement on Reciprocal, Fair, and Balanced Trade. 2 According to this Framework Agreement, the US commits to apply the higher of either the US Most Favored Nation (MFN) tariff rate or a tariff rate of 15%, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the EU. Furthermore, the United States intends to promptly ensure that the tariff rate, comprised of the MFN tariff and the tariff imposed pursuant to Section 232 of the Trade Expansion Act of 1962, applied to originating goods of the European Union subject to Section 232 actions on pharmaceuticals, semiconductors, and lumber does not exceed 15%. On the other hand, the EU intends to eliminate tariffs on all US industrial goods.   

In this context, we strongly call on the European Commission to ensure that this ongoing investigation will not lead to an increase of tariffs - compared to the Framework Agreement - applied by the US on EU furniture exports and to protect European exporters from further instability.  

It must be noted that furniture products that are considered a derivative product of steel and aluminium face even higher tariffs when exported to the US. As such, we also call on the European Commission to negotiate a more favourable treatment leading to lower tariffs for these goods in future discussions with the US on section 232 tariffs on steel and aluminium.  

EFIC supports open but rules-based international trade. In this context, we regret the imposition of tariffs by the US. Even if the proportion of furniture exported to the US from the EU is smaller in comparison to other countries, such as Vietnam and China4, and the furniture segment targeted is different, with the EU exporting to the US mainly higher end furniture, the generic 15% tariff agreed upon will bring challenges to exporting companies, including increased costs, will create disruptions in the supply chain and likely halt long-lasting cooperation with US importers, and have the unintended consequence of slowing investment in the United States. In addition, this will lead to particularly high uncertainty in consumer decisions as consumer prices will increase, or the postponement of home furnishing projects for the middle classes, whose cost of living continues to rise. However, we appreciate the fact that a Framework Agreement was concluded recently, which is likely to bring predictability for companies. Any deviation from the agreement and additional tariffs for EU exports to the US would result in additional challenges for our exporters.  

The European furniture industry is an important sector for economic stability, supply chain resilience and generation of export revenue:  

• Economic Stability: The furniture industry is part of the EU's economic stability. It is one of the sectors driving the manufacturing economy, providing substantial contributions to GDP through its extensive network of suppliers, manufacturers, and service providers. 

• Supply Chain Resilience: The furniture industry contributes to a diversified and resilient supply chain involving a multitude of small and medium enterprises (SMEs). Tariffs might force these businesses to reassess their export strategies, potentially impacting their resilience and adaptability. 

• Export Revenue: Furniture exports generate revenue for the EU. This revenue supports both industry innovation and infrastructure development. High tariffs could deter competitive pricing, diminishing growth prospects for EU companies in the US market, and leading to reduced export revenues which can affect broader economic performance. In addition, higher tariffs could also lead to additional imports into the EU from other countries, such as Vietnam5 or China, as they try to divert exports to cope with the high US tariffs. This will further challenge EU furniture sector competitiveness.   

We thank you for your consideration and remain available for an exchange on the matter and for providing further insights from our industry.