Like everyone else, we’re watching the tariff situation closely. Being located in proximity to Washington, DC makes the news ever-present and announcements continue to fuel stock market changes and keep the pundits busy trying to stay current and predict the future.

While it’s hard to predict with any confidence what  the impact of the on-again, off-again import tariffs may have on the commercial furniture market, my 35 years of experience do give me some insights. Dramatic shifts in how we make, sell and dispose of commercial furniture might be closer than we thought.

Of course, the real impact will depend on what actually gets implemented, when and how. Those impacts may be very significant, and ultimately may actually help to encourage some aspects of the circular economy. Specifically, here’s a summary of how I believe tariffs might spur an increase in the reuse and recycling of furniture:

Most Likely Impacts

• Higher Prices for Both New and Used Furniture: Tariffs on imported furniture or materials used in furniture manufacturing (such as wood, metals, plastics, and upholstery) will increase the cost of either the furniture or the component parts – which is very likely to increase the price of new furniture, even if it is domestically assembled. As we saw in the used car market during the Covid-19 pandemic, the costs of used options may also rise, making resale more attractive to sellers but less affordable to buyers.
  
  
• Increased Awareness of Sustainability: If tariffs lead to higher prices for furniture that is not recyclable, environmental factors may become more important to customers purchasing furniture. This would create a greater demand for products that are refurbished, repaired, or made from recycled materials, helping to spur new markets. Commercial furniture customers,  particularly those who are budget-constrained, are likely to favor reused or recycled furniture as a more affordable alternative,  boosting demand for the second-hand market.  As I mentioned, the cost-savings may be limited by increased demand for these alternatives.

Possible Impacts

• Material Shortages: If tariffs target specific materials or components  commonly used in furniture production, manufacturers might face supply chain issues. This could prompt them to use  more recycled or repurposed materials as a cost-saving measure. This would be good for the circular economy, and reduce the emissions associated with sourcing and importing virgin materials.
  
  
• Boost for Local Recycling Markets: With tariffs potentially increasing the cost of imported furniture, the domestic second-hand and recycled furniture market could see a rise in demand. Customers  and manufacturers would find take-back programs more attractive, encouraging reuse.
  
  
• Global Trade and Waste Management: International trade restrictions will  affect the flow of recyclable materials (like plastic or wood) that are often used in furniture manufacturing. If tariffs hinder the import/export of such materials,  there may be fewer  high-quality raw materials for recycling, creating a supply crunch for manufacturers that  rely on those materials for furniture production.

Certain Impacts

I started out saying that no one could predict with certainty what the result of undetermined policies will be. But one thing I can say with confidence is that business leaders don’t like so much uncertainty. With so much potential change to the global economy swirling, it’s hard for anyone to plan and make investment decisions.  

Faced with uncertainty many manufacturers will take a cautious approach and  look for more predictable sources for the materials and supplies that they need; and one of the nearest places to source known materials is from your own customers. Some furniture manufacturers, notably MillerKnoll’s rePurpose and Humanscale’s BEAM programs are already offering ‘take back’ programs. They may increase these efforts, while others will explore the feasibility, logistics and costs to begin new programs. In this way, it is likely that the tariffs and accompanying unpredictability will combine to increase circularity in the furniture industry. This may not be short-lived. The companies that invest in building these programs and find new revenue streams and efficiencies will be unlikely to abandon them, even when and if the threat of tariffs is lessened. Why would they?   

Learn more about how Installnet’s Ecoserv program can help your organization stay ahead of market shifts by offering a smart, sustainable solution for furniture reuse and recycling.