Late Thursday, President Trump shocked markets by threatening to slap 5% surcharges on Mexican imports beginning June 10, as part of a demand that the country do more to contain a surge of migrants streaming across the border.
The tariffs, set to begin June 10, would gradually climb to 25% on October 1 if Mexico doesn’t take steps “to dramatically reduce or eliminate” the number of migrants, Trump said on Thursday. Such a strategy would hurt American shoppers and small businesses, experts say, just as U.S. growth is slowing and the threat of more tariffs on Chinese imports looms larger.
According to Reuters, “a typical furniture seller would have to raise the retail price of a table that wholesales for $400 to about $999 from $799 to cover the 25% tariff costs, said Stephen Antisdel, founder of Precept Partners, an e-commerce consultancy.”
“Forcing Americans to pay more for produce, electronics, auto parts and clothes isn’t the answer to the nation’s immigration challenges, and this certainly won’t help move USMCA forward.” – National Retail Federation
You might say you can hold out on getting a new table until things are resolved but what if your refrigerator or washing machine breaks? Electrolux (which owns Frigidaire) and Whirlpool (which owns Amana) have manufacturing plants in Mexico for refrigerators, washers and stoves.
While POTUS commented a while back that the new round of Chinese Tariffs would make American goods more competitive, a study by two researchers at the University of Chicago and a Federal Reserve Board Governor on the “washing machine tariffs” placed a year ago found American manufacturers jacked up the cost of their appliances to match the higher price of their competitors. Those appliances rose to an average of 12 percent more after the imposition of the tariffs, or roughly $86 to $92 more per appliance.
Other items consumers and remodelers will have impacted by these tariffs will include plumbing fixtures, lighting fixtures and components such as switches and wire, and raw materials like gold. Obviously, if your new remodel is not underway, the items specified by your designer could be impacted in the near future.
With concerns about the real estate market shifting to a buyers market, many homeowners are considering doing projects now to increase the value of their home (and to enjoy living in the changes before it is listed on the market).
Tips for Working around Price Increases
- I think it’s import for us to support our local small businesses. They provide great customer service that the behemoth online companies cannot.
- Invest in the items that get the most wear. This includes your tile and SPC luxury vinyl flooring. Also place priority on items that will be difficult or more costly to upgrade later – such as your cabinets.
- Look for alternative materials. Some man-made materials might be a better options. A quartz countertop that looks like an exotic marble will probably have a better price point, require less maintenance and might have less waste than the real slab. Waterproof shower panels such as the one shown above will be much easier to maintain than grey elm without sacrificing on style. New materials are being developed all the time and your designer may be able to steer you to a product you haven’t even heard of before.
- If you really don’t want to make sacrifices in the materials you’ve picked out, talk to your designer and contractor about doing your project in stages. Changing out a 4″ backsplash to a full-height tile splash down the road is a relatively easy upgrade.Placing an expensive countertop on RTA cabinets (think: lipstick + pig) to hit a modest budget number also isn’t a wise choice. Savvy buyers can tell the difference and will likely lower their offer on your home because they require cabinetry of better quality.
- Embrace Bold Colors. Using color is a great way to make a seemingly sparse room much more dynamic and expensive looking. Add in some favorite dishes, accessories and art pieces and your guests will think you never wanted upper cabinets crowding your kitchen walls.Down the line, as your family or needs grow, adding upper cabinets in a warm wood tone or light lacquer finish is a nice accompaniment to darker base cabinets that ground the room.
- Adding statement lighting to any room instantly adds interest and drama and can make up for not having a large budget to hire an electrician to rewire your home. Changing lighting fixtures is an easy way to update a room’s look that can be done as a DIY project multiple times.