Written by: RBA Insights — Posted on: August 23, 2025

When the President announces a national security investigation into imported furniture, it is more than just a policy headline. It signals a potential shift in the foundation of how the U.S. furniture market sources, prices, and sells its products. With nearly $25.5 billion in furniture imported into the United States last year, about 60 percent from Vietnam and China, any serious movement on tariffs has the power to ripple through every showroom, warehouse, and supply chain in the country. For retailers, this is not a distant debate happening in Washington. It is a direct question of margins, customer loyalty, and competitive survival.

The political framing of the investigation positions tariffs as a way to rebuild American manufacturing, especially in states like North Carolina and Michigan where furniture-making has historic roots. But the practical reality is that tariffs, if implemented, will raise costs for import-heavy retailers almost immediately. Companies like Wayfair, RH, and Williams-Sonoma already saw their stock prices fall sharply in the hours after the announcement. At the same time, U.S.-based manufacturers like La-Z-Boy and Ethan Allen saw modest gains, reflecting investor bets that domestic production will become more competitive if imports are penalized. In the short term, Wall Street is telling us what retailers on Main Street already know: the impact of tariffs will not be evenly distributed.

For states like California and New York, where dense urban markets drive a constant churn of imported goods, tariffs could quickly translate into higher consumer prices. Retailers that rely heavily on overseas suppliers will face compressed margins unless they pass costs directly to customers. In high-cost-of-living states, that means slower demand, delayed purchases, and greater reliance on financing tools to soften the sticker shock. Florida and Texas, with fast-growing housing markets, will feel the tension in a different way. Rising furniture costs could dampen new-home furnishing activity, slowing what has been a critical driver of retail demand in these regions.

Meanwhile, North Carolina, long the heart of American furniture manufacturing, may stand to benefit in the medium term. Domestic factories could see renewed orders if imports become more expensive. But even here, the picture is not simple. Many U.S. manufacturers rely on imported components, fabrics, and materials. Tariffs aimed at finished goods could still raise their input costs, complicating the very revival they are supposed to fuel. The American Home Furnishings Alliance has already criticized the probe, arguing that the national security justification is weak and that tariffs could harm domestic manufacturers by raising their own expenses without significantly expanding their production capacity.

For retailers in Massachusetts, a state with high-end markets and discerning consumers, the challenge will not only be in cost but in communication. When prices rise, whether due to tariffs or inflation, customers need to understand the value behind what they are paying. A transparent message about quality, sourcing, and service becomes just as important as the furniture itself. Brands that handle this conversation well can maintain trust; those that do not risk losing loyalty to competitors who frame their pricing story more effectively.

What does this mean strategically? First, sourcing diversification becomes non-negotiable. Retailers who have relied almost exclusively on Chinese or Vietnamese imports will need to build relationships in alternate markets such as Indonesia, Malaysia, Mexico, and even Central America to spread risk. Second, domestic partnerships must be revisited. Not every retailer will shift to full U.S.-made lines, but blending in more local production, even on select SKUs, can serve as both a hedge against tariffs and a marketing advantage. Third, pricing models and financing options must be recalibrated. If the average living room set climbs by 10 to 15 percent, customers in every state, especially price-sensitive markets like Texas and Florida, will lean more heavily on tools like buy now pay later or long-term in-house financing. Retailers must be ready to offer these solutions seamlessly.

The looming tariffs also make brand differentiation more urgent. If all retailers face higher input costs, the winners will be those who compete not only on product but on service, delivery, and post-sale experience. Margins may tighten, but customer perception can still expand. In a world where imported goods cost more, what matters most is not just what you sell, but how customers feel about buying it from you.

At RBA Global, we view this moment as more than a cost shock. It is a structural turning point. Tariffs will force furniture retailers to examine their supply chains, rethink their pricing strategies, and sharpen their communication with customers. But disruption creates opportunity. The retailers who adapt quickly will gain market share while slower competitors struggle to reconfigure their models.

The investigation is set to conclude in 50 days. That is not a long time for Washington, but in retail, it is an eternity if you know how to use it. The smart players will already be running scenario models, negotiating with alternate suppliers, and preparing their customer messaging strategies. Whether tariffs ultimately arrive or not, the retailers who act as though they will are the ones best positioned to thrive in the decade ahead.