Want To Pay More? Then Don't Read The Following.
Updated: Jul 20, 2021
With the recent news of more tariffs being imposed (in addition to the tariffs imposed late last year) on China, Mexico, India and other countries, designers are making every effort to educate their interior design and decorating clients how to continue to have access to furniture, furnishings, and equipment for their projects before and after prices go up again and/or products become unavailable.
The tariffs will not only have an impact on products coming in from China or several other countries, they will ultimately effect "Made In America" goods that utilize parts imported into the U.S.
Cheryl Marable McMahon of Blue Azalea Interior Design Studio has a great opinion piece below that give clients an idea on what is coming and how best to handle the increases...before they happen.
Please note that not all Made In America products will be effected.
"You know the old adage “Where there is smoke, there’s fire.”? Well, I feel obligated to tell you that there is some smoke behind the scenes of the design world. The discussion surrounds everything that goes into your home - from building materials to furniture, accessories and window treatments.
The cost of everything related to your home is about to rise - but you could see prices decrease first.
WHAT THE WHAT?
I know, that doesn’t sound like it makes sense, but it actually does. Let’s discuss.
The United States has set already a 25% tariff on Chinese imports. Imports from India, Mexico and many others look to be coming soon. This means that:
The cost of goods from these countries will increase as will every product made in the United States that uses ANY imported components from these countries. Don’t think that affects domestic products? Well, think about this... Electronic components are largely from China. In this day and age, what doesn’t use any electrical component? This is just one example and there are soooo many including metal work, glass, wires, hardware, and textiles. Together, these affect every single item we can think of in our homes (from building or remodeling to furniture and window coverings).
Here’s the timeline:
STEP 1: NOTHING IS HAPPENING (or so it seems)
Manufacturers try to renegotiate costs with their overseas suppliers and take financial hits by absorbing the extra tariffs.
STEP 2: SMALL COST INCREASES & INVENTORY PROBLEMS
Manufacturers can only stretch so far. Fear of increasing prices to the entire cost of the tariffs causes fear of losing business, but they cannot absorb all the cost forever. And, if a manufacturer is stretching to finance their inventory, the tariffs will diminish the cash available for stock. Having available inventory in stock will become a problem.
We are definitely seeing this happen behind the scenes. As a designer, I am receiving daily tariff notices from my vendors. I am also seeing numerous companies with issues of getting and keeping inventory in stock.
STEP 3: PRICES WILL DECREASE (but it’s temporary)
Some manufacturers will go out of business. How many exactly? Well, that’s unknown. They will have to dump product as they go out of business and that means product discounts. Other companies, will start dumping products that reduce or eliminate their profitability because of the tariffs. This means more product discounts. The amount and depth of discounts will vary but looks to be inevitable.
Buyer beware! If there isn’t a thriving business, or if the product is no longer available to purchase, it's going to be difficult to enforce any warranty on your purchase.
STEP 4: BUYING PRODUCTS IS A LOT MORE DIFFICULT
With manufacturers selling off product with the discounts, it's been suggested that we will be left with less products to choose from. If manufacturers are no longer being able to absorb the additional tariff costs, we may likely see fewer options and these options which would be offered at higher prices. These prices could continue to increase if the cycle of tariffs continue to increase.
So, let’s ask the questions:
Can you avoid the tariffs? The short answer is no. It would involve falsifying customs documents and when caught, the fines would be disastrous and clearing customs in the future would be extremely difficult - if not impossible - task.
Is this forever? If history holds true, the unfortunate answer is that prices will increase and stay at the higher rates.
WHAT YOU NEED TO DO!
As a homeowner, there are a few things that you can do now to get through these additional price increases, lack of choices and longer lead times.
BUY BETTER QUALITY ITEMS TODAY!
We live in a throw-it-away society, but the need to buy quality products that will last will be increasingly important. Work with a designer to create your plan. Don’t purchase products that you will have to replace in a couple of years. Buy today and save big later.
Some products like chandeliers are taking tremendous tariff hits. If you don’t buy them now, you might not have the option to purchase them - at all - later. If you do have the option to purchase, it will have probably have a much higher price tag.
As a side note…. The US is losing more of its ability to import into China and other countries. This means that our scraps from our throw-it-away society are slowly not being accepted by these countries. The need for more sustainable, longer-lasting, higher quality products that will last (and not be thrown away) will be absolutely necessary. Regulations demanding this are being speculated and discussed in the design and manufacturing worlds.
OPTION 1 - Buy quality now at the current pricing and avoid later issues.
OPTION 2 - Buy low-quality now and risk using that same low-quality sofa waaaaay past its prime (hoping that you can replace with more low-quality (but possibly no longer low-cost) items in the future.
OPTION 3 - Buy low-quality now and buy better quality later but at a MUCH higher price tag.
No one wants the budget for their holiday renovation, remodel or update to shrink by 20% when they are finally ready. No one wants to make those decisions at a higher cost and then not have the selections they want be available.
I don’t know about you, but I would rather stretch myself a little now and have the best insurance policy (a well-designed home and furniture inside) I can afford to ride me through these uncertain times. AND, I would break through the smoke and do it as soon as I am able. With the month over month changes coming, it truly is starting to feel like any choice you don't make today will be decided for you later. I suggest reaching out to a designer that can guide you through these times and give you the best design possible for your life today and the years to come."
Give us a call and let's talk.