With lumber and furniture tariffs in effect, New Mexico industries brace for impact

The rising price of wood, combined with a strained economy, has had a profound impact on Albuquerque-based furniture maker Andy Monahan, who owns Watersong Furniture on Central. Monahan said he braced for higher lumber prices when President Donald Trump took office in January.

“I have learned through the years to weather the ups and downs,” Monahan said. “I’m hanging onto my business, but I’m treading water right now. So we’re waiting for better times.”

Monahan has been making custom-built wood furniture and cabinetry for more than 40 years. Since the economy has tightened, he said, people just aren’t spending money like they used to.

“People are holding up. They’re looking out for themselves, which they should. Medicine, food and shelter is a lot more important than a piece of furniture,” he said.

Trump’s tariffs on foreign furniture and wood products took effect Tuesday, prompting uncertainty among Albuquerque-area businesses and developers, who say the duties will put pressure on an already tight market.

At the end of September, the Trump administration announced tariffs of 10% on imported lumber and 25% on upholstered furniture, kitchen cabinets and vanities, aimed at decreasing the United States’ reliance on foreign products. On Jan. 1, tariffs on upholstered furniture will rise to 30% and tariffs on kitchen cabinets will rise to 50%.

The U.S. imports 40% of its softwood lumber from other countries, according to Andrew Muhammad, professor of agricultural and resource economics at the University of Tennessee. More than 80% of foreign lumber comes from Canada.

For New Mexico businesses that get all of their wood from abroad, the tariffs have created financial hardship.

For local housing developers, it’s hard to predict the tariffs’ impact. Though with housing affordability already a major problem for buyers, developers like J.P. Rael have concerns about how more expensive lumber might affect the market.

“I think the hardest thing that we’re facing is consumer sentiment,” said Rael, president of the Albuquerque Home Builders Association. “The idea of impending price increases in an already difficult market makes it extremely tough.”

Al Baca, New Mexico sales manager for materials supplier Builders FirstSource, said using domestic lumber isn’t always an option, especially for building homes. The wood native to New Mexico isn’t able to withstand the arid climate, so builders turn to imports, usually from Canada.

“In this market and this climate, you can’t just put any wood into a house or any lumber, otherwise we’d be buying domestic all day long, because domestic ends up being cheaper,” Baca said.

In a proclamation, White House officials said the tariffs were intended to “bolster American industry and protect national security.”

“President Trump recognizes that an overreliance on foreign timber, lumber, and their derivative products could jeopardize the United States’ defense capabilities, construction industry, and economic strength,” the proclamation said.

Government officials, Trump said, found via an analysis of wood imports that the country’s dependence on foreign timber “threatens to impair national security.”

Some experts say this reasoning doesn’t hold up.

“No politico is going to explain why, say, your dining set or your coffee table is somehow a threat to national security because it came from China, Vietnam,” Muhammad said.

Higher prices will get passed on to the final consumer, Muhammad said, which will make business more difficult for flooring or furniture companies.

The tariffs could make Canadian imports so expensive that the U.S. invests in timber production stateside, though Muhammad said Trump’s constantly changing tariffs aren’t beneficial to growth.

“You need the business environment to have a certain permanence about it to foster investment,” Muhammad said. “There’s nothing permanent about these tariffs.”