CKCA’s hosted a successful national forum in Kelowna, B.C. in September, where we welcomed more than 120 attendees from across the country. Another sold out event! We are proud of the momentum and interest CKCA events are driving and we work hard to build value into these events. After having enjoyed the highs of connecting face to face with our members, touring shops, having valuable conversations and learning from industry experts, attendees headed back to their respective businesses with new ideas and a sense of optimism knowing they were not alone, reassured the industry is filled with supportive people.
But, then the tsunami hit.
On Sept. 26, media started calling CKCA wanting the industry’s reaction to the tariff announcements issued by U.S. President Donald Trump.
Trump’s proclamation to use Section 232 of the Trade Expansion Act would place a 25 per cent tariff on kitchen cabinetry imported into the U.S. beginning Oct. 14. There was to be a subsequent tariff increase to 50 per cent as of Jan. 1.
This was totally unexpected. We had watched other impacted sectors struggling, but understood our industry sat firmly under the purview of CUSMA (Canada U.S. Mexico Agreement).
With Section 232’s sweeping powers, the Canadian kitchen cabinet sector found itself in the same category as other countries including China and Vietnam - a national security threat to the U.S.
Impact for Canadian exporters
With an estimated 30 per cent of our industry exporting a portion of their cabinet production (some as little as 2 per cent, others as much as 100 per cent), these companies are facing an unprecedented crisis. Not only have they been forced to navigate new rules at the border, they now face a sudden and significant drop in business. Some have sought help from trade lawyers, custom brokers and government relations/public relations firms, others are looking at how they can continue the millwork portion of their business while letting go of the cabinetry business for now. All of this, unplanned, unbudgeted, unexpected and catastrophic to their business.
The bottom line is that 25 - 50 per cent tariffs make trade into the U.S. prohibitive. The businesses that once exported south of the border are now forced to look back to Canada for potential business. Even though the Federal Government is suggesting we “look at other markets”, this is unrealistic. What countries would be accessible, viable markets to replace the U.S.? It takes time and money to establish new supply chains, and there are the logistics and costs of transportation overseas. There are no quick fixes.
All manufacturers will be impacted
As those companies that ship to the U.S. will need to pivot back to the Canadian market to survive, every other manufacturer will be impacted. The Canadian market is already pressurized due to declining housing starts, a sagging economy, and foreign imports still pouring in. So, as those U.S. exporting companies pivot, the Canadian market becomes extremely competitive for everyone.
Our next steps
CKCA recognizes how serious this situation is and we have taken decisive action. CKCA has leveraged its Canadian industry allies, hired a government relations firm, met with lawyers and stakeholders and put a delegation together to meet with elected and trade officials. We have spoken out in media to profile our industry. We have surveyed and collected important data and distributed advocacy materials to all our members. Now, most importantly, we absolutely need you!
Now, more than ever, we need to pull together and push as hard as we can. We need to speak up for our industry as a collective. If we do not, the consequences of what is transpiring with American trade and tariffs will be felt throughout the entire industry.
Please consider joining the CKCA and be part of the national voice. Help us deliver our message to all levels of Government:
We want the 25 per cent (headed to 50 per cent) tariffs with the United States dropped.
We call on government to require that any business receiving government funding, subsidies or incentives within the building and construction sectors must source cabinetry products “Made in Canada” as a condition of eligibility.
We call on government to address the issue of foreign imports entering Canada at below fair market value that are undermining our domestic industry and threatening our livelihoods.
