PETALING JAYA: The decision by the United States to delay higher tariffs on selected furniture products offers limited relief to Malaysian manufacturers amid rising domestic costs and weak demand in the United States, say industry players.
On Wednesday, US President Donald Trump postponed planned tariff hikes on upholstered furniture, kitchen cabinets and vanities, keeping the current 25% rate in place.
Tariffs on certain upholstered wooden products were previously set to rise to 30% on Jan 1, while duties on kitchen cabinets and vanities were due to increase to 50%.
Malaysian Furniture Council president Desmond Tan Boon Hai said the announcement does not significantly improve Malaysia’s competitiveness, as the same tariff rate was imposed on many other countries.
For some local manufacturers, Tan said, the extension of the 25% tariff would have only a modest impact, as it mainly affects kitchen cabinets, vanities and upholstered furniture.
“Manufacturers of upholstery products will only benefit decently from this extension,” he said.
Tan added the industry hopes the government can renegotiate tariffs on Malaysian-made furniture with Washington, though such efforts ultimately depend on a bilateral agreement.
On domestic challenges, he said the government could provide more immediate support by reviewing policies that have significantly raised operating costs for furniture makers.
“These include the expansion of the sales and service tax (SST), mandatory EPF contributions for foreign workers, minimum wage adjustments, recalibrated petrol and electricity tariffs, and the multi-tier levy on foreign workers due to take effect this year,” he said.
Tan warned that the multi-tier levy, introduced to encourage the hiring of local workers by making foreign labour more expensive, may not achieve its intended outcome.
“The reality is that the industry may not be able to afford the new levy, while locals continue to shun jobs in this sector,” he said, warning that prolonged pressure could put the wider furniture, timber and export industries at risk.
He urged the government to consider exemptions from costly policies and provide fast-track financial assistance to companies badly affected.
“These measures would give firms time to adjust, including expanding their design offerings, improving their manufacturing processes, and speeding up delivery times to remain competitive globally,” he said.
Malaysia’s key furniture exports include solid wood, dining tables, chairs and upholstered sofas, with modular furniture also playing a growing role.
Meanwhile, Kuala Lumpur and Selangor Furniture Association honorary president Matthew Law said weak US consumer demand continues to impact the industry.
“The residential sector shows no improvement, and changes in trade traffic will not affect the Malaysian industry,” he said.
According to the Malaysia External Trade Development Corporation (Matrade), Malaysia’s total furniture exports were valued at RM12.83bil in 2024.
The United States remained the largest market at RM6.05bil, followed by Singapore (RM1.18bil), Australia (RM683.6mil), Japan (RM629.8mil) and the United Kingdom (RM543.5mil).
On April 2 last year, the United States announced sweeping tariffs on imports from nearly all countries around the world, including Malaysia.
Malaysian exports were initially subjected to a 25%, but an executive order signed on Aug 1 reduced them to 19%.
However, new 25% tariffs which affected kitchen cabinets and upholstered furniture were imposed in September and took effect in October.
