US tariffs on Canadian kitchen cabinets are set to double to 50% on January 1, threatening thousands of small manufacturers. Cabinet makers report falling volumes, layoffs and shrinking margins, and one of Canada's biggest producers is weighing a move of production to the United States.
Alain Ouzilleau spent 40 years building Cabico into one of Canada's biggest kitchen cabinet makers, and he is now reluctantly weighing a move of production to the United States. Tariffs on Canadian kitchen cabinets are set to double to 50% on January 1, Ouzilleau said, threatening thousands of small manufacturers that employ almost 25,000 people.
Cabico shipped 90% of its products to the US before President Donald Trump returned to office and began imposing tariffs on Canadian goods. Ouzilleau said the threat of further tariffs poses an existential risk to the Quebec-based company and many of its peers.
Layoffs and idle capacity
Cabico invested roughly C$30 million ($21 million) over the last five years to expand capacity and automate its two plants in Quebec and Ontario. However, its volumes shipped to the US fell by 25% from 2024 levels, and it laid off more than a quarter of its 700 employees.
The industry is highly fragmented and has shed more than 10% of its workforce since Trump first imposed tariffs. Luke Elias, president of the Canadian Kitchen Cabinet Association, said imports have undercut prices so heavily that Canadian companies operate at just over half the capacity of three years ago.
According to Elias: "The tariffs have been devastating for the industry," and many companies would shut if the rate doubles next year. His own firm, Muskoka Cabinet, has cut 40% of its 70 staff and operates three days a week.
Talks collapse, relief falls short
Last year Trump signed an executive order imposing a 25% duty on Canadian kitchen cabinets under Section 232. The situation worsened after talks between Ottawa and Washington collapsed in August and Washington imposed new tariffs covering more parts of the cabinet industry.
In July, Canada's Finance Department announced a 25% surtax on imports of certain wood cabinets and vanities for up to 200 days. The Canadian International Trade Tribunal is investigating whether an import surge harms domestic producers, and its inquiry ends January 15.
Manufacturers said the surtax has not stemmed imports, and many want a duty of at least 100%. The US and Canada have resumed talks, but Ouzilleau said his hopes of a deal are getting a little bit lower.
Source: Investing.com (Reuters)
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