Hardwood Floors Oct/Nov 2019

2020

The Tariff Impact

will continue feeling the effects, but that they won’t last. “There are a lot of low-priced engineered products that come fromChina. But China is being replaced by other Asian countries, like

Cambodia and Vietnam. The manufacturing will just move to a different location, so it’s a short-term effect.”

government-imposed tariffs on Chinese imports, NWFAmembers offered varying assessments, with 32 percent saying the tariffs had resulted in smaller margins, 25 percent saying they had raised prices on wood flooring as a result of tariffs, and about a fifth saying they had changed their product mix as a result. Some manufacturers have seen an impact on the cost of their machinery and other supplies. Some companies lower in the supply chain said that the price increases were absorbed before reaching them. And others said that their higher-end customers were not sensitive to price increases, so they were able to easily pass on any that did affect them. More than 40 percent said tariffs have had no impact on business whatsoever. Among those who said tariffs made no difference to their sales or margins, the primary reason was that their business did not rely on Chinese imports. “We stopped importing from China a long time ago,” one respondent said. Another said: “About 99 percent of our new installations are solid, unfinished flooring manufactured in the U.S. The wood, underlayment paper, staples, sandpaper, floor finishes, etc., are all made in the U.S., so we haven't noticed any price increases on materials due to tariffs.” Stringer said he expects the industry

IMPACT OF CHINESE IMPORT TARIFFS (COMBINED PARTICIPANTS)

41%

No impact

32%

Smaller margins on wood flooring

25%

We've raised our wood-floor prices

21%

Change in product mix

Decrease in overall wood-flooring sales

19%

Change in where we source product from

16%

Improved price competitiveness for wood flooring

12%

Reduced quality in product from China

7%

Increased sales of wood flooring due to less competition from wood-look product

5%

Increased margins on wood flooring

1%

5%

10%

15%

20%

25%

30%

35%

40%

45%

44 hardwood floors www.hardwoodfloorsmag.com