2 Stocks Hurt By Trump's Furniture Tariffs and 1 That Benefits

Key Points

• The White House announced plans to implement tariffs on imported furniture, effective Oct. 14.
• The new levies affect upholstery, cabinets, and bathroom vanities with rates as high as 50%.
• While many popular brands will face margin pressure from the new policy, some companies could be positively impacted by the new taxes.

The Tariff Man announced his return last week after a brief absence, and the new levies are set to impact some very notable companies within the coming weeks. The Trump Administration released a new tariff schedule on furniture, such as upholstery, cabinets, and bathroom vanities.

Why your kitchen pantry is a matter of national security remains up for debate, but the new import taxes are scheduled for enactment in mid-October, leaving retailers little time to front-load or prepare cost-cutting measures. While several stocks have already taken a hit on this news, the tariff impact won’t be evenly distributed, and some companies could even gain market share.

Today, we’ll examine two stocks that will be negatively impacted by import taxes on furniture, and one that will benefit thanks to its domestic manufacturing.

New Furniture Tariffs Will Hit Retailers Differently

According to documents released by the White House, the new tariffs on furniture take effect on Oct. 14, with the highest rates being phased in by the end of the year. The schedule currently looks like this, but (as always) could be subject to change.

• A 25% global tariff on upholstered furniture, which will rise to 30% on the first day of 2026.
• A 25% global tariff on kitchen cabinets and bathroom vanities, which will rise to 50% on the first day of 2026.
• A 10% global tariff on softwood lumber.

Favored nation status means imports from the U.K. will be capped at 10%, and imports from Japan and the European Union will be capped at 15%. While the effect will be felt throughout most of America’s trading partners, the countries most impacted are Vietnam and China, where U.S. furniture suppliers have established a strong manufacturing base.

2 Stocks That Will Feel Pain From Furniture Tariffs, and 1 Poised to Benefit

Tariffs will hurt many furniture companies in the retail sector, but the impact will be uneven (and in some cases, perhaps a net positive). We’ve identified two stocks with heavy import reliance that will face margin pressure, and one company with strong domestic manufacturing prowess that could steal market share from its competitors.

RH Inc: Reliance on Vietnam and China Leaves Margins Vulnerable

Formerly known as Restoration Hardware, RH Inc. NYSE: RH is one of the companies pressing the panic button over new furniture levies due to its luxury brand status and dependence on Asian imports. During its fiscal Q2 2025 earnings release, the company warned of a potential $30 million revenue hit in the second half of the year due to tariff pressure, with an additional $40 million pushed out until 2026. RH grew sales by 8.4% year-over-year (YOY) in the quarter; however, EPS and revenue missed analyst expectations, and the stock has declined by an additional 10% this month.

Furniture tariffs are especially painful for RH, as the company imports more than 70% of its products from Asian countries facing the stiffest rates, including approximately 35% from Vietnam and 23% from China. The company’s business model has relatively high fixed costs due to its flagship galleries and luxury marketing campaign, and a tariff increase would likely lead to significant margin compression.

Further complicating matters are frozen housing markets, which are keeping many of RH’s customers on the sidelines. A focus on high-margin, high-ticket items is a double whammy right now, and Zacks Research downgraded the stock to Strong Sell earlier this month. 

Wayfair: Marketplace Structure Will Force Tough Choices

If you want a reason to dislike Wayfair Inc. NYSE: W stock beyond its cringy Blake Griffin commercials, Trump’s new tariff policy provides a fundamental reason. While the company is unlikely to see margin compression on the scale of RH, Wayfair will have to make some difficult decisions in the coming weeks. 

Wayfair doesn’t manufacture its products and has limited inventory. Its business model is a marketplace where third-party sellers offer their items, and Wayfair takes a percentage of each sale (called the take rate). Due to this structure, the company is somewhat insulated from the full tariff impact, but an estimated 35-40% of its third-party suppliers are located in Asian countries subject to the harshest rates.

Wayfair has a vast supplier base and a robust logistics network, allowing it to have more options to mitigate tariffs than other retailers. However, the new levies will force the company to either pressure suppliers to absorb the costs or pass them on to cash-strapped customers to maintain its margins. The stock is up more than 100% year-to-date (YTD), and this appears to be an ideal time to take profits.

Ethan Allen: Domestic Sourcing Provides Distinct Advantages Under New Policy

One company set to benefit from import taxes on furniture is Ethan Allen Interiors Inc. NYSE: ETD. While the company imports some materials and products, approximately 75% of its merchandise is manufactured in North America. A strong domestic manufacturing presence is a major advantage in the current environment, allowing Ethan Allen to either A) maintain prices and gain market share, or B) implement a small price hike and boost margins. If other competitors are facing 25% tariffs on their goods, even a 5% price rise from Ethan Allen could have an outsized impact on margins without sacrificing volume.

ETD shares have been stuck in a range, advancing only 5% YTD despite earnings beats and an attractive valuation. Tariffs could push new customers Ethan Allen’s way, which would revive the company’s sagging sales growth (down 4.9% YOY during the most recent quarter) and boost the stock price. And here’s a bonus: ETD shares currently pay a 5% dividend.