Luxury retailer says U.S. manufacturing will struggle with new furniture tariffs

The CEO of Restoration Hardware is warning that high-quality wood and metal furniture manufacturing “does not exist at scale in America” as President Trump uses a tariff investigation to spur production in the U.S.

The company’s chief executive, Gary Friedman, alerted shareholders in a recent quarterly earnings letter, weeks after Mr. Trump announced a probe into whether tariffs on imported furniture were warranted to protect the domestic industry.

“Just when you might have thought the tariff conversation was complete, the announcement of a new furniture investigation and the possibility for additional furniture tariffs, on top of existing furniture tariffs, and incremental steel and aluminum tariffs were introduced with the goal of returning furniture manufacturing back to America,” Mr. Friedman wrote.

“We believe most in our industry hope that this investigation surfaces the difficulty of that task, as current manufacturing for high-quality wood or metal furniture does not exist at scale in America,” he added.

RH is a luxury home furnishing retailer with stores in multiple countries.

It cut its revenue outlook for the year after missing expectations in its second-quarter report. The company predicted a $30 million hit from existing global tariffs.

Mr. Trump in August announced a 50-day investigation into furniture imports under the Section 232 national security statute.

The move paves the way for new levies on furniture made abroad to bolster American-made furniture and jobs.

The White House said the tariff probe is part of a multipronged approach to restoring American dominance in the furniture industry.

“The United States was one of the largest furniture makers in the world as recently as the late-2000s — a position that has since been undermined by unfair foreign trade practices,” White House spokesman Kush Desai said. “The Trump administration is committed to implementing a nuanced, multifaceted approach of tariffs, deregulation, tax cuts and energy abundance to restore American manufacturing dominance.”

Mr. Trump recently said “artists” in North Carolina and other states with a history of furniture making should teach their kids and grandkids how to make furniture.

“It’ll be done pretty quickly,” Mr. Trump said.

Mr. Friedman said RH should be able to weather new tariffs better than smaller brands, though he warned of adverse outcomes.

“More tariffs on furniture could also result in U.S. manufacturers moving production from the U.S. to countries closer to their international clients, avoiding freight costs and the likelihood of counter tariffs,” he wrote. “Our hope is that the investigation will seek out the perspective of a cross section of leaders in our industry as we drive toward the best outcome for our country.”

At the same time, his letter showed that RH is responding to Mr. Trump’s tariff landscape by shifting production out of China and “aggressively responding” to whopping 50% tariffs on India.

“While the hand-knotted rug category is highly specialized and not manufactured in America, we have begun the process of identifying alternative countries,” Mr. Friedman wrote. “We have also resourced a significant portion of our upholstered furniture to our own North Carolina factory, where we have been manufacturing for 10 years and plan to continue doing so.”

The company projects that over half, or 52%, of its upholstered furniture will be produced in the U.S., 21% in Italy and 12% in Mexico by the end of fiscal 2025.

Mr. Friedman also expects the percentage of goods made in the U.S. to “continue to increase throughout 2026.”

Driving production to the U.S. is a key goal of Mr. Trump’s tariff agenda. He also sees tariffs as a negotiating tool with foreign nations and a way to collect revenue for the Treasury.

Importers pay the tariffs to customs officials when they bring foreign goods into U.S. markets.

Some companies sued over the tariffs, resulting in court decisions against Mr. Trump. The Supreme Court will take up the case in November.

Mr. Trump says a ruling against his nation-by-nation tariffs would be devastating.

“We would have to give back trillions and trillions of dollars,” Mr. Trump said Friday on “Fox & Friends.” “We’re a rich, powerful country, and when we’re rich, we can do more things for the people.”

The legal case would not affect sector-specific tariffs on steel, aluminum or cars — or on furniture if those are enacted.