InDEPTH | AT A CROSSROADS
At a Crossroads HOW TARIFFS ARE RESHAPING THE U.S. AREA RUG INDUSTRY
A s the U.S. area rug industry nav- igates a shifting global trade landscape, tariffs have emerged as a powerful dichotomy—at once a dis- ruptive force and a catalyst for reinven- tion. Manufacturers, suppliers, and retailers alike are recalibrating sourcing, pricing, and distribution strategies to adapt and stay flexible, all while con- tending with the broader headwinds of inflation, volatile shipping logistics, and persistent economic uncertainty. What began as anxiety over rising costs and compressed margins has evolved into a more layered reality. Industry leaders now describe a marketplace in flux, defined as much by strategic adaptation and new opportunity as by constraint. Domestic producers are capitalizing on renewed interest in U.S.- made goods, while importers are navi- gating tariff complexity with sharpened agility—positioning the area rug sector at a consequential crossroads. Consumers’ Price Sensitivity and Retail Realities Recent insights from leading industry research group Circana (formerly NPD
From domestic production to global diversi cation, the soft ooring industry is confronting a new era of trade challenges.
Group) sharpen the lens on the con- sumer side. Marshal Cohen , Chief Retail Advisor, notes that consumers typically tolerate a 10-percent to 12- percent price increase without signifi- cant pushback. “Retailers will likely promote their way out of tariff-related price pressures,” Cohen says, citing early examples of “no tariff pricing” campaigns designed to capture con- sumer attention and loyalty amid uncertainty. However, the tariff impacts ripple more intensely through manufacturers, sup- pliers, and logistics providers than at the retail shelf. Cohen explains that the supply chain is already adjusting — with some manufacturers pulling for- ward orders, holding inventory to wait out tariff shifts, and retailers seeking “must-have pricing” from wholesalers to preserve margins amid rising costs. This will likely result in fewer promo- tions, forcing consumers to prioritize purchases and potentially trade down or switch brands. Larger retailers with robust inventories appear poised to capitalize on these shifts. “The pandemic showed us how
BY CECILE CORRAL CONTRIBUTING EDITOR
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