On Sept. 29, President Donald Trump issued a proclamation to increase tariffs on softwood lumber and its derivatives, including certain upholstered furniture, kitchen cabinets and vanities. The president previously issued an executive order in early March, directing the secretary of commerce to initiate a Section 232 investigation to determine whether the importation of wood products undermines national security. President Trump concurred with the Commerce Department’s findings that the importation of wood products weakens domestic manufacturing capacity, industrial resilience and economic stability, necessitating the imposition of corresponding tariffs.
Below is a summary of the proclamation and some analysis of the broader implications for domestic production and the hospitality sector.
Adjusting Imports of Timber, Lumber and Their Derivative Products into the United States (Proclamation, Fact Sheet)
- Duty Rates. The proclamation sets the following tariff rates, as outlined in Annex I:
- 10% – softwood lumber and timber;
- 25% – upholstered wooden furniture products; and
- 25% – completed kitchen cabinets and vanities, including related parts.
- Timeline. The increased tariffs will go into effect on goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. EDT on Oct. 14, 2025. The tariffs will later increase for upholstered furniture and for kitchen cabinets and vanities to 30% and 50%, respectively, effective Jan. 1, 2026.
- The tariffs on wood products will not apply in addition to the 25% tariff on automobiles and related parts. If an automobile contains lumber or timber content, it will be subject to the 25% auto tariff, not the tariff on wood products.
- With respect to imports from China, these Section 232 tariffs do not stack on the 10% IEEPA-based reciprocal tariff but do stack on the 20% IEEPA-based fentanyl/trafficking tariff as well as any tariff imposed under Section 301 of the Trade Act of 1974.
- With respect to imports from Canada and Mexico, these tariffs do not stack on tariffs imposed in response to drug trafficking and other issues at the northern and southern borders. Those tariffs are also suspended for imports compliant with the United States- Mexico-Canada Agreement (USMCA).
- Authority. These tariffs are levied under Section 232 of the Trade Expansion Act of 1962. The Trump administration has repeatedly leveraged this authority to impose “reshoring tariffs” designed to encourage manufacturers to shift production of targeted goods from other countries back to the United States for national security-related reasons.
- Notably, Section 232 provides the Trump administration with greater certainty that the tariffs could be maintained in the long term. While 232 tariffs can still be challenged over whether a sufficient national security justification exists to impose them, the president’s authority to issue tariffs under Section 232 is clear. These duties will be unaffected by the two pending legal challenges to the IEEPA-based tariffs: Trump v. V.O.S. Selections and Learning Resources v. Trump.
- Exemptions. Based on existing trade frameworks, the following trading partners are exempt from the increased duties:
- United Kingdom: The Section 232 tariff on subject imports from the United Kingdom will not exceed 10%.
- European Union: The Section 232 tariff on subject imports from the European Union will not exceed 15%.
- Japan: The Section 232 tariff on subject imports from Japan will not exceed 15%.
- Future Trade Agreements. The proclamation makes clear that the tariffs on wood products may be modified to implement new trade agreements. The secretary of commerce and U.S. Trade Representative (USTR) are directed to continue discussions with trading partners about the national security threat posed by the importation of wood products, “with adjustments to tariffs depending on the status or outcome of such negotiations.” USTR is required to provide the president with an update on the status of these negotiations by Jan. 1, 2026, and again by March 28, 2026.
- If a trading partner fails to abide by an existing or future trade framework, the president reserves the right to adjust the tariffs on wood products.
- Next Steps. The secretary of commerce is directed to:
- continue considering how to address the national security threat posed by the importation of wood products, including through the establishment of an inclusion process for additional lumber and timber derivatives;
- establish a process to monitor threats of undervaluation of foreign wood products subject to the outlined tariffs. If there is a risk of undervaluation of select imports, the secretary is granted the authority to implement “specific, compound, or mixed tariffs at a rate that he determines to correspond approximately to the ad valorem duty rate otherwise in effect”; and
- provide the president with “an update on imports of hardwood timber and lumber, their markets, and the domestic industry” by Oct. 1, 2026. The president will then decide whether a “phased import duty” should be imposed on such products, as was recommended by the Commerce Department.
Domestic Production
The United States is among the world’s largest producers of lumber and timber, exporting $9.57 billion worth of forest products in 2024. Roughly 70% of domestic demand for softwood lumber is met by domestic production. The United States relies on foreign imports to fill the gap, though the White House indicated that the United States has sufficient raw materials and industrial capacity to supply up to 95% of domestic demand.
Canada is the largest exporter of softwood lumber to the United States—the U.S. imports about one third of the lumber it consumes from Canada because domestic production is insufficient to meet demand. The new 10% duty will have major implications for both American consumers and the Canadian economy. Canadian softwood lumber is already subject to an antidumping and countervailing duty totaling 35.19%. The Commerce Department recently increased these duties to 14.63% and 20.56%, respectively, alleging that Canada undercuts prices and provides unfair subsidies that distort competition in the U.S. market. With the imposition of an additional 10% tariff, the combined duty on Canadian softwood lumber will rise to 45.19%, placing Canadian producers at a greater competitive disadvantage. The high duty on Canadian softwood lumber could further raise costs for domestic producers that are reliant on foreign inputs.
Impact on the Hospitality Sector
The imposition of tariffs on softwood lumber and wood furniture will disproportionately affect the hospitality sector. The short-term lodging industry relies heavily on foreign inputs to construct, renovate and furnish properties. Increased tariffs could significantly increase procurement costs and potentially delay renovations or openings.
The timing of construction and renovation is a critical factor in hospitality operations. Delayed project completions not only increase financial burdens but also jeopardize the ability of hotels to open in alignment with peak travel seasons or major events. The hospitality sector is currently preparing for large-scale international events, including America 250, the 2026 FIFA World Cup and the 2028 Olympics in Los Angeles. Higher input costs combined with potential supply shortages could reduce revenue opportunities for property owners and diminish the broader economic activity that these events are expected to generate in surrounding communities.
In addition, the hospitality sector is uniquely positioned as one of the highest purchasers of furniture. Due to the constant flow of guests, furniture in hotel rooms and restaurants must frequently be replaced to maintain the guest experience and brand consistency. Tariffs on wood furniture could undermine operators’ ability to refurbish their properties, jeopardizing their ability to keep properties updated and competitive.
The effects of these tariffs will be most pronounced for smaller and independent operators that lack the flexibility to absorb rising costs. Franchisees are further required to maintain brand-approved design specifications, limiting their ability to change suppliers on short notice.
Companies or groups that are interested in raising concerns about these tariffs may want to consider bringing those concerns up with the Department of Commerce and Congress.
