With the implementation of “301” tariffs on September 24, 2018, we’re seeing numerous price increase announcements from the plethora of cabinet companies who import Chinese RTA cabinetry and components. These price increases are ranging from 6.5% to 10% and telegraphing the risk to as much as 25% by January 1, 2019.
Here are a few excerpts from the letters I have in hand:
“‘Domestic’ and ‘Imported’ cabinet manufacturers rely significantly on material and labor from China.” – JSI letter to customers dated September 19, 2018
“Most manufacturers, including domestic manufacturers who purchase components from China, will get the tariff.” – email to customers from CNC Cabinetry dated September 21, 2018
“Due to the uncertainty surrounding future tariffs and how it will affect the market, we also cannot guarantee future pricing as we have no control of this dynamic.” – Sunco Cabinets letter to customers dated September 19, 2018
In contrast to domestic and imported cabinet manufacturers who rely heavily on imported Chinese components,
I will also note that the Trump Administration can be unpredictable and could strike a deal with China tomorrow and unwind the “301” tariffs – however the uncertainty will likely remain high as these trade deals are negotiated.
Even more importantly and systemic, acpi, along with other domestic cabinet manufacturers have come together and documented that the Chinese government routinely and significantly subsidizes Chinese cabinet and wood component manufacturers. As such they are doing irreparable harm to the domestic cabinet and wood component industry and we’ve joined together to prepare a case against these unfair trade practices for the International Trade Commission to consider. If we are successful in this endeavor the level of the tariff will be along the lines of the Plywood impact (100%) and carry a 5-year term. Let’s see what happens.
Essentially, we want to encourage you to buy American and eliminate this risk for you and your customers.
Very truly yours,
Larry W. Denbrock, President & CEO, acpi
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