This time last year, the main issue hardwood flooring suppliers were contending with was stubbornly high interest rates and the subsequent impact on both existing home sales and new housing starts activity. Fast forward to the present date, and it’s the topic of tariffs that’s dominating conversations.
It’s an especially concerning issue for not only hardwood manufacturers and importers that ship wood flooring products into the U.S. market for their distributor partners, but also for domestic wood flooring manufacturers that source from suppliers around the globe.
“Right now the big issue for us is the tariffs,” said Derick Roy, sales director for Quebec-based Wickham Hardwood Flooring. “The majority of our business is in the U.S., our best partners are in the U.S., our best suppliers of lumber are in the U.S., so it does affect us tremendously. We’re already paying 25% more, as we’ve been for the last couple of weeks here. It’s already affecting what we’re buying and how much we’re buying as well. So overall, it’s affecting our entire line. Until we find a way to work through it, or we find new partners, existing Canadian partners are going to see an increase in purchasing from us.”
Even more frustrating for Canada-based suppliers like Wickham is the “on again/off again” nature of the tariffs imposed by the Trump Administration since he took office for the second time. Proponents say the threat of tariffs—or the outright imposition of tariffs with threats to raise them even higher if prodded—provide a strong bargaining chip. The flip side of that equation, however, is the uncertainty created by the start/stop nature of the current tariff situation. Critics say it makes it nearly impossible to plan ahead in this type of environment.
“The tariffs are officially under effect, and two days later, no, it’s not under effect,” Roy said. “At first you think you’re going to change your pricing, then you’re not. Then you realize that there is going to be a lot of back and forth. With invoice pricing, you don’t know if you should pass it through or waive it. You can’t prepare for the months ahead because you don’t know. Our partners have been tremendous during the whole process in understanding and working with us. It’s all about constant communication. Everyone’s in the same boat.”
Even those Canadian suppliers that are philosophically averse to tariffs could understand if the tariffs were implemented as an anti-dumping measure to protect the market share interests of American companies. But that’s clearly not the case here, experts say. “We are not a low-cost, dumping type of manufacturer, and we pride ourselves on making the best possible products at a price that goes along with making that category of product,” said Wade Bondrowski, director of sales USA, Mercier. “We could see how tariffs could come into play if we were a low-cost producer driving down a market or being subsidized by a particular government, but with Mercier and the majority of our Canadian producers this is not the case. We find a one-shoe-fits-all type of tariff is objectively unfair. We always thought of ourselves as a great trading partner to the United States.”
Of course there’s a chance—although it’s a longshot—that Canada and the U.S. will come to some sort of mutually beneficial agreement that boosts the economies of both nations while preserving a longstanding relationship. “We remain hopeful in talking to people from our government, the Quebec Wood Export Bureau (QWEB), that we work hand in hand,” Wickham’s Roy said. “We hope that the USMCA products remain tariff-free. It might be a blind hope, but they’ve showed that they could be willing to work with those products as tariff-free, meaning that if the product is transformed in the U.S. and Canada, then it would remain tariff-free and that our products can stay off the table.”
Been there, done that
Tariffs are certainly not new to the flooring industry. In recent years, tariffs on imported hardwood flooring and raw lumber have become one of the most pressing challenges facing the U.S. hardwood flooring market. As part of trade disputes, particularly between the U.S. and China, several key categories of wood products were subjected to hefty tariffs. In 2018, during Trump’s first administration, the U.S. imposed a 25% tariff on imported wood products from China. Although the tariff was initially meant to address issues such as unfair trade practices and intellectual property theft, its impact on the hardwood flooring industry has been significant.
For many U.S. hardwood flooring manufacturers, the cost of importing wood from overseas has risen substantially. These imports were essential for keeping up with demand, especially for labor-intensive engineered hardwood products, exotic hardwoods and specialty species that are not native to the U.S. As the cost of these materials has increased due to tariffs, manufacturers have been forced to either absorb the additional costs or pass them on to consumers. This has led to higher prices for finished hardwood flooring products, putting a strain on both manufacturers and consumers.
The tariffs have also disrupted supply chains, making it more difficult to obtain specific types of wood in a timely and cost-effective manner. This has forced some flooring companies to look for alternative sources of raw materials, both domestically and from other countries, which has, in turn, increased competition for high-quality lumber. It’s no secret that U.S. importers have turned to suppliers in Southeast Asia—namely, Vietnam, Cambodia, Indonesia and Thailand—as a means to circumvent the hefty tariffs imposed on China in recent years.
While some manufacturers have adapted by increasing their reliance on domestic hardwoods, this strategy is not without challenges. The U.S. domestic hardwood supply is finite, and demand from industries such as construction and furniture manufacturing often competes with the needs of the flooring market. Furthermore, the effects of the tariffs have been exacerbated by logistical issues, including global shipping delays and rising shipping costs. These factors have combined to create an environment where hardwood flooring companies are finding it increasingly difficult to manage costs and ensure product availability, all while attempting to maintain competitive pricing in the market.
When it comes to the implementation of tariffs, observers agree there will be winners and losers in both the short term and long term. The winners are those companies that for years have leveraged their domestic manufacturing capabilities in anticipation of precisely what’s taking place in the current environment. Case in point is Mountville, Pa.-based AHF Products, which operates more than a dozen plants in the U.S., including several engineered and solid wood flooring factories. While the company does produce some specialty products in Cambodia, by and large it sources materials and finishes most of its wood flooring in the U.S.
“We own and operate domestic plants, so we represent a hedge against tariffs,” said Milton Goodwin, vice president, AHF Products. “Our Cambodia plant is not subject to tariffs currently, and we are an American-owned plant over there. So, if there’s any relief if there are tariffs, we’re hopeful that cooler heads would prevail and we wouldn’t be affected because we’re an American-owned company, one of the few, if not the only one over there. If/when the prices go up on Canadian wood imports, we’re well positioned to help our customers in that case.”
Other major suppliers that maintain a mixed sourcing approach say they are ready for whatever comes. “Anytime you have a new administration come in, you have to try to figure out what that’s going to mean to the import-export market,” said David Moore, vice president, product marketing, Mohawk. “We saw what happened during Trump’s first administration, so we know what to expect. Engineered wood is still heavily imported, so that competitive landscape is likely going to change if additional tariffs are levied.”
Housing market challenges
Tariffs, while on the forefront of everyone’s minds, are not the only issue hardwood suppliers need to contend with. It’s well documented that the housing market is one of the primary drivers of demand for hardwood flooring. Historically, new home construction and remodeling projects have been the two largest sources of demand for flooring products. However, changes in the housing market have a direct impact on the hardwood flooring sector. Several key trends within the housing market are currently influencing the demand for hardwood floors.
First, the ongoing rise in home prices has made home ownership increasingly unaffordable for many prospective buyers. According to data from the National Association of Realtors (NAR), the median home price in the U.S. has increased steadily over the past decade. As a result, fewer first-time homebuyers are entering the market, which has slowed down the pace of new home construction. New home builders, who traditionally represent a significant portion of hardwood flooring consumers, are therefore less likely to choose high-end flooring options like hardwood when faced with budget constraints. Instead, builders often opt for more affordable alternatives like laminate or vinyl flooring, which offer similar aesthetics at a lower price point.
Additionally, interest rates have a profound effect on the housing market and, by extension, on the demand for hardwood flooring. Rising mortgage rates, such as those seen in recent years, have led to fewer homebuyers and reduced the incentive for homeowners to engage in remodeling projects. This is because higher rates make it more expensive to finance home purchases or renovations, causing many to delay or forgo remodeling projects that would traditionally involve hardwood flooring installation.
Heading into 2025, hardwood suppliers were looking for some relief in this regard, based on signals in 2024 that the Federal Reserve would begin to lower interest rates. But with the threat of continued inflation due primarily to tariffs and the subsequent rise in costs for a host of goods, it doesn’t appear that’s going to happen anytime soon.
“We don’t see any relief on the horizon, so we’re not waiting on interest rates to save the day for us,” AHF Products’ Goodwin said. “A lot of the builders have gone to other products. For the builders that are still utilizing wood and a lot of them are utilizing engineered or coming back to engineered, we’re excited about that. Solids have been more of a challenge on the builder side, so you’re relegated there to more upscale or higher-end home builders. Most of the track builder guys have gravitated to engineered or SPC, WPC—that kind of thing. I don’t wake up every morning thinking about interest rates.”
Of course, all that could change if the American consumer—who has already shown enough resilience to weather past economic storms—feels confident enough to jump back into the homebuying market.
“I believe interest rate activity will still drive demand this year,” said John Hammel, senior director, residential hard surfaces, Mannington. “Once rates drop, we expect pent-up demand to improve in the second half of 2025.”
Kyle McAllister, director of hardwood, Shaw, is hoping the administration’s policies will bear fruit. “I hope that he goes to work on inflation and interest rates, and we should benefit from that. It’s going to be an interesting year.”
Competition for raw lumber
When it comes to issues that impact the hardwood flooring market, there are both external and internal factors. One of the main external factors is the competition for raw lumber materials from segments such as wine-barrel manufacturing, furniture, paper/pulp industries and the like. This phenomenon has intensified as various industries continue to demand high-quality timber. This competition has been exacerbated by the growing global demand for timber, particularly from countries like China, where demand for wood products has risen as the economy continues to expand.
One of the most significant impacts of this competition is the rising price of raw lumber. As the cost of timber increases, manufacturers of hardwood flooring are faced with higher production costs, which can either reduce profit margins or result in higher prices for consumers. In some cases, flooring companies have had to rethink their sourcing strategies, turning to more affordable, yet lower-quality sources of wood or even considering alternative materials.
The high demand for timber has also led to increased pressure on domestic lumber supplies. U.S. forests have long been a vital source of hardwood for the flooring industry, but deforestation and mismanagement of timber resources have become increasingly problematic. Sustainable forestry practices are essential to ensuring a long-term, reliable supply of high-quality hardwood, but these practices are often costly and difficult to implement.
The U.S. hardwood flooring industry has responded by seeking to improve sourcing strategies. Some manufacturers have shifted their focus to certified sustainable hardwood suppliers, such as those adhering to the Forest Stewardship Council (FSC) certification standards. Others are exploring more innovative solutions, such as utilizing wood that was previously considered waste or repurposing older flooring materials. Still others are focusing on vertical integration strategies.
“We’re not counting on somebody else to supply us our raw materials,” AHF Products’ Goodwin said, citing the company’s ownership of two local sawmills. “We also make our own plywood, and we cut our own veneers. But that doesn’t mean that we don’t buy some things. We do source some veneers, but a lot of it is done in-house. But we’re still battling out there on solid wood, for instance, especially white oak. So, as long as Americans keep drinking wine and whiskey, we will probably always compete with them on that.”
With the battle for white oak in recent years, lumber prices in the U.S. have seen significant volatility, which has added another layer of complexity to the hardwood flooring market. Fluctuating lumber prices are not only a challenge for manufacturers but also a driving force that shapes the broader economy, particularly in sectors like construction, furniture manufacturing and home improvement. The factors influencing lumber pricing trends are multifaceted, ranging from supply chain disruptions and demand fluctuations to environmental policies and changes in global trade dynamics. This volatility, while not unique to hardwood, affects the cost structure of all wood products, including flooring materials.
What’s happening is not unprecedented. One of the most notable trends in lumber pricing occurred during the COVID-19 pandemic. In 2020 and 2021, lumber prices soared to record highs, driven by a combination of factors. During the initial stages of the pandemic, sawmills across the country were forced to temporarily shut down or operate at reduced capacity due to health and safety concerns. This caused significant disruptions to the lumber supply chain. At the same time, demand for building materials, including lumber, surged as the home construction and home improvement sectors experienced an unexpected boom. This was partly due to a shift in consumer priorities during the pandemic, with many individuals opting to renovate their homes as they spent more time indoors. Additionally, low mortgage rates prompted more people to purchase homes, further intensifying demand for lumber.
As demand exceeded the available supply, lumber prices surged. The price of a thousand board feet of softwood lumber reached over $1,500 in mid-2021, a nearly threefold increase from the previous year. This spike created ripple effects throughout industries reliant on wood, including the hardwood flooring market. Hardwood flooring manufacturers, who already face competition for raw materials from other industries, found themselves grappling with rising costs for both softwood and hardwood materials. In turn, these price increases were passed down the supply chain, contributing to higher retail prices for consumers.
After reaching peak prices in 2021, lumber prices have gradually fallen from their historic highs, bringing some relief to industries dependent on wood products. By the latter part of 2022 and into 2023, the price of lumber dropped back down to more typical levels, hovering around $400 to $500 per thousand board feet for many types of softwood lumber. This decline is attributed to several factors, including a stabilization of supply chains, increased production from domestic sawmills, and a cooling of the housing market as mortgage rates rose and home sales slowed.
While the price drop has been welcomed by many in the construction and flooring industries, the impacts on the hardwood flooring market are more nuanced. For manufacturers of hardwood flooring, the reduction in lumber prices has provided some relief in terms of cost control, particularly for composite wood products such as engineered hardwood. However, for solid hardwood flooring manufacturers, the effects are not as dramatic, as hardwood prices have remained relatively stable compared to softwood.
Several long-term factors are expected to influence lumber pricing trends in the U.S. For starters, the dynamics of global trade will continue to play a significant role in shaping lumber prices. The U.S. has historically been a major importer of softwood lumber, particularly from Canada, which supplies a significant portion of the U.S. timber needs. However, the lumber trade between the U.S. and Canada has been subject to trade disputes, tariffs and quotas. For instance, the U.S. and Canada have experienced several rounds of trade negotiations related to softwood lumber, which have occasionally led to higher prices for U.S. consumers.
Climate change is also influencing lumber pricing trends. Extreme weather events, such as wildfires, hurricanes and droughts have the potential to disrupt timber production and supply chains. Wildfires, for example, have devastated timber-rich areas in western regions of the U.S., limiting the availability of raw materials for manufacturers. Furthermore, the growing risk of pests, such as the emerald ash borer and pine beetle, is also threatening hardwood forests, particularly in the northern U.S. and Canada. The long-term impact of these environmental factors on lumber pricing is uncertain but could lead to supply shortages and increased prices.
Moreover, pricing volatility also affects long-term planning and forecasting for flooring companies. The hardwood flooring market is highly competitive, and companies need to be able to predict and manage raw material costs effectively to maintain their profit margins. Significant price fluctuations in lumber can create uncertainty in business operations, making it difficult for manufacturers to set consistent pricing strategies or offer competitive rates.
Competition from alternatives
Another significant challenge to the U.S. hardwood flooring market is the increasing popularity of alternative flooring options, particularly luxury vinyl plank (LVP), laminate and engineered wood. These products have gained substantial market share due to their affordability, ease of installation, durability and ability to mimic the look of real wood.
Luxury vinyl plank, in particular, has seen a surge in popularity because of its ability to replicate the appearance of hardwood while offering water resistance, scratch resistance and ease of maintenance and installation. As a result, many homeowners and builders have turned to LVP as a more practical and cost-effective alternative to traditional hardwood flooring.
Laminate flooring, which is resurging, has also seen a resurgence due to advancements in design and technology. New laminate options closely resemble hardwood floors, offering a wide range of textures and finishes. These innovations have helped to bridge the gap between the look of real wood and the affordability of synthetic materials.
We’ve seen over the last 15 years wood flooring losing share to rigid core, WPC and laminate in some cases. But the advantage that hardwood holds, proponents say, is the proven return on investment the category offers compared to alternative materials. “The look-alike products are made of plastic, and they are not always recyclable,” Wickham’s Roy said. “Wood products are more environmentally friendly, and we hope that will continue to draw people to hardwood flooring.”
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