RH faces challenges as Trump’s tariff threats impact furniture market

RH, a luxury retailer of home furnishings, has faced a challenging period in the stock market recently due to the looming threat of furniture tariffs proposed by former President Donald Trump. This decline in RH’s stock performance, particularly a 7% plunge in after-hours trading on September 11, 2025, came on the heels of disappointing second-quarter earnings. Tariffs were specifically mentioned as a leading cause of the company’s underwhelming financial results.

The ramifications of Trump’s tariff threats have reverberated across the furniture market, which is already grappling with intricate global supply chains and changing consumer preferences. RH, a business heavily dependent on international sourcing, is now confronted with a substantial challenge to its operational efficiency and profitability. These developments indicate a turbulent road ahead for RH and the wider spectrum of home furnishings.

Former President Trump’s announcement in August 2025 to launch a Tariff Investigation on Furniture imports to the U.S. has sent shockwaves through the furniture industry. The investigation, to be concluded within 50 days, is anticipated to lead to tariffs being imposed at an unknown rate to incentivize furniture manufacturing within the U.S. Trump specifically mentioned states like North Carolina, South Carolina, and Michigan as potential hubs for American furniture production. The decision to conduct the inquiry under Section 232 of the national security statute has further heightened concerns within the sector.

The disclosure of new tariffs is particularly significant given the existing duties on furniture imports from China. Before the recent threat, Chinese furniture imports were already subject to a 25% Section 301 tariff from Trump’s previous term, along with additional tariffs. The suspension of the “de minimis” duty exemption in May 2025 further compounded challenges for Chinese imports, which constitute a sizable portion of U.S. furniture imports.

Fear and uncertainty have gripped the market, with RH’s stock value declining by 9% in the days leading up to the Q2 earnings report on September 11. The subsequent 7% drop following the report was directly tied to the negative impact of tariffs. Similarly, other import-dependent furniture retailers like Wayfair, Williams-Sonoma, and Arhaus witnessed declines in their stock values, indicating a broader industry concern. In contrast, U.S. manufacturers such as La-Z-Boy experienced stock gains post-announcement. Industry associations have opposed the tariffs, citing increased costs for consumers and potential harm to domestic producers.

RH, heavily reliant on international furniture sourcing, now stands at a crossroads as a potential victim of the tariffs. With 90% of its furniture sourced globally, RH faces the risk of escalating import costs. As a response, RH has adjusted its revenue growth outlook and EBITDA margin, while also delaying strategic initiatives. CEO Gary Friedman has highlighted concerns about the impact of tariffs on the industry, prompting RH to explore production shifts out of China and increase manufacturing in North Carolina.

The tariff issue has delineated winners and losers within the furniture market, with RH in a vulnerable position. While RH navigates the turbulent market waters, domestic manufacturers like La-Z-Boy and Ethan Allen with robust U.S. production capabilities are poised to benefit from the tariffs. The industry faces a period of uncertainty and adaptation as it navigates the complexities of protectionist trade policies under the looming threat of furniture tariffs.