President Donald Trump has announced new tariffs on various consumer products, including upholstered furniture, kitchen cabinets, and certain pharmaceutical drugs. These tariffs, which will take effect on October 1, range from 25% to 100%. Experts warn that these tariffs will likely increase prices for consumers on targeted goods and create uncertainty for businesses navigating the changing policy landscape.

In a series of social media posts, Trump stated that the tariffs on kitchen cabinets, furniture, and heavy trucks are being implemented for "National Security and other reasons." While he did not specify the rationale for the pharmaceutical tariffs, they appear aimed at encouraging domestic production. An exemption is available for companies that are in the process of establishing manufacturing facilities in the U.S.

The proposed tariffs include a 50% levy on kitchen cabinets and bathroom vanities, as well as a 30% tariff on upholstered furniture. Jason Miller, a professor of supply chain management at Michigan State University, noted that these tariffs are expected to further increase furniture prices, which have already risen due to previous tariffs. According to the personal consumption expenditure index, furniture prices jumped 4.7% over the year ending in August, a significant increase compared to a 5.1% decline during the same period last year.

"You're certainly going to see more impact on furniture prices," Miller said. He added that the new tariffs could pose challenges for furniture wholesalers and retailers, as they struggle with rising costs.

The tariffs on kitchen cabinets and home goods may also affect homebuilders, potentially offsetting benefits from recent interest rate cuts by the Federal Reserve. Dominic Pappalardo, chief multi-asset strategist at Morningstar Wealth, explained that homebuilder companies are already facing difficulties moving inventory due to high interest rates. "Now they have another challenge to deal with because of some of the input costs with new housing increasing as well," he said.

Despite the anticipated price increases, experts suggest that sluggish demand in the housing market may limit the extent of these hikes. "Demand right now is relatively weak," Miller said, indicating that this could act as a buffer against significant price increases.

Some domestic producers in the home goods sector may benefit from the new tariffs, as foreign competitors will face higher import costs. The American Kitchen Cabinet Alliance (AKCA), a trade organization, expressed support for the tariffs. Perry Miller, president of Indiana-based Kountry Wood Products and AKCA leader, stated, "President Trump's 50% tariff on all kitchen cabinet imports will allow us to hire thousands of new workers and ramp up domestic cabinet production across our nation."

In addition to the tariffs on home goods, Trump has introduced a steep 100% tariff on branded or patented pharmaceutical products, with the exception of those produced by companies building manufacturing plants in the U.S. This move is part of a broader strategy to bolster domestic production in the pharmaceutical sector.