Malaysia’s Furniture Industry Sees Limited Relief Despite US Tariff Delay

PETALING JAYA, Malaysia — Malaysian furniture manufacturers have reacted cautiously to the United States’ recent decision to delay increased tariffs on certain furniture products, saying the postponement brings only limited benefits to an industry already facing significant challenges.

Late last week, U.S. President Donald Trump announced that the proposed tariff increases — which were slated to push duties on upholstered furniture to 30% and tariffs on kitchen cabinets and bathroom vanities up to 50% — would remain at the current 25% rate for the time being.

Industry Response: “Delayed, Not Resolved”

While the tariff delay has temporarily softened the blow for some exporters, industry leaders in Malaysia say it does little to reinvigorate demand or make Malaysian products significantly more competitive in the U.S. market.

“Extending the current 25% tariff offers only modest impact,” said Desmond Tan Boon Hai, President of the Malaysian Furniture Council. He noted that similar tariff rates apply to many other exporting countries, meaning Malaysia has not gained a distinct advantage.

For producers of upholstered wooden furniture, the extension may provide some breathing space, but the broader benefit is limited given ongoing challenges, including rising operational costs and weak American consumer demand for big-ticket items like furniture.

Domestic Headwinds Compound Export Challenges

Local stakeholders argue that even with the tariff postponement, Malaysia’s furniture sector faces headwinds at home that undermine export competitiveness.

Tan highlighted that rising business costs — including expanded sales and service tax (SST) rates, mandatory Employees Provident Fund (EPF) contributions for foreign workers, minimum wage adjustments, and recalibrated fuel and electricity tariffs — are squeezing margins for manufacturers. He also warned that a new tiered levy on foreign workers could further strain resources, especially as the local workforce remains reluctant to take up certain manufacturing roles.

“These domestic policy pressures are arguably more immediate than changes in U.S. tariff schedules,” Tan said, urging the government to consider exemptions or support measures such as short-term financial assistance to help companies adjust and stay competitive.

Weak U.S. Demand Still a Concern

Meanwhile, Matthew Law, honorary president of the Kuala Lumpur and Selangor Furniture Association, stressed that weak consumer demand in the U.S. remains a major obstacle. “The residential market shows no improvement, and typically, tariff delays do not stimulate new interest if end buyers are still hesitant,” he commented.

This sentiment reflects broader concerns about global market uncertainty. Despite numerous calls for policy recalibration and export incentives, furniture exporters say orders from the U.S. have not rebounded, and many are exploring alternative markets to diversify risk.

Looking Forward: Policy, Negotiations and Adaptation

Industry representatives are urging Malaysian authorities to negotiate better tariff terms with Washington or pursue bilateral trade agreements that can facilitate more favourable access for Malaysian products. However, some economists warn that reopening existing trade pacts could have unintended consequences if not managed carefully.

At the same time, Malaysia’s manufacturing sector has shown signs of stability despite external uncertainties, with diversification into other export markets and domestic demand helping to cushion potential shocks.

For now, Malaysian furniture makers say the tariff delay is better than an immediate hike — but without stronger policy support and market demand, the relief may be more symbolic than transformational.