2025 Tariff News
The United States recently increased wood tariffs on imported timber, lumber, and wooden products, sending a shockwave with ripple effects through the construction, manufacturing, and retail sectors. These new wood component tariffs are straining operating budgets and having a drastic impact on costs, making companies reevaluate their current supply chain management practices.
The Importance of Domestic or Diversified Supply Chains
As companies face longer lead times, higher unit costs, and potential delays, they are seeking innovative ways to navigate supply chain uncertainty, prompting a shift toward alternate materials or domestic sourcing. Inventory planning, cost forecasting, and strategic sourcing have become essential business practices to maintain operational continuity and mitigate the financial impact of these evolving trade regulations.
Developing a diversified supply chain has also become crucial for many businesses, as they assess their exposure to import duties and potential inventory shortages. A tariff-proof supply chain relies on continuous monitoring of potential risks to ensure uninterrupted production despite changing tariffs.
Tariff Impact on Imported Wood Components
Pursuant to Section 232 of the Trade Expansion Act of 1962, the imposed wood supply chain tariffs, which went into effect on October 14, 2025, will affect the following imported materials:
- Softwood Lumber and Timber: 10% tariff
- Upholstered Wooden Products: 25% tariff, increasing to 30% tariff effective January 1st, 2026
- Kitchen Vanities and Cabinets: 25% tariff, increasing to 50% tariff effective January 1st, 2026
Comparing Onshoring vs. Nearshoring
Onshoring and nearshoring offer distinct benefits and are viable options for offsetting the rising costs of the newly imposed tariffs.
Onshoring
Onshoring wood components involves moving a company’s manufacturing and business operations back from overseas to its home country. Advantages include:
- Achieving greater control of the supply chain
- Aligning with local standards and regulations
- Boosting communication
- Enhancing public perception (Made in USA)
- Improving quality control
- Simplifying logistics
- Strengthening IP protection
Nearshoring
Many tariff-auditing manufacturers are beginning to consider nearshoring to alleviate the impact of rising tariffs. The practice involves outsourcing production to a nearby country, often within the same time zone or region, to reduce potential risk factors and optimize the following benefits:
- Access to a larger labor pool
- Cultural similarities
- Easier communication
- Faster shipping speeds
- Lower costs
How Lead Times and Duties Affect Unit Costs
Long lead times can result in delays and contribute to the following issues:
- Greater need for expedited shipping
- Higher carrying costs
- Increased true unit costs
Import duties, customs fees, and tariffs can further compound the costs for high-volume or high-value items, widening the gap between estimated and actual per-unit pricing.
Strategic Sourcing and Inventory Planning Services
Strategic sourcing is a data-driven, systematic process for acquiring specific goods and services that align with a company’s long-term business goals. Inventory planning optimizes safety stock, reorder points, and forecasting accuracy to avoid excess or shortages while meeting consumer demand.
Both services rely on market trends and sales data to predict future needs, ensuring raw materials and finished goods are available when needed. To develop a resilient supply chain that improves operational efficiency and long-term competitiveness, businesses must continuously:
- Analyze expenditures
- Evaluate supplier reliability
- Explore wood tariff exemptions
- Negotiate terms that balance quality and cost
How E.W. Hannas Builds Resilient Supply Chains
E.W. Hannas is a strategic partner in navigating supply chain risk and tariff volatility. Since 1918, we have supplied our customers with precision wood products that meet or exceed their expectations. Over 100 years later, we remain committed to providing innovative solutions and real-time insights that support a tariff-proof supply chain.
Contact us to discuss the challenges associated with supply chain visibility and see how the team at E.W. Hannas can meet your evolving needs. You can also request a quote to get started today.