As new US tariffs are placed on imported lumber furniture, Deesawat Industries Co, a Thai wooden furniture manufacturer, is urging Thai companies not to abandon the US market, but rather enhance their presence there.
The US announced a 10% tariff on foreign softwood lumber and timber, and a 25% tariff on kitchen cabinets, vanities and upholstered wooden furniture, starting from Oct 14.
Jirachai Tangkijngamwong, director of Deesawat, said the new tariffs affect not only Thai exports to the US, but also create uncertainty for exports to other countries.
Some non-US importers have delayed orders or reduced volumes until they can more clearly grasp the policy’s broader effects, he said.
“The worst part is the uncertainty. We never know if the tariff rate will change again,” said Mr Jirachai.
In 2024, roughly 80% of Deesawat’s total sales were from exports, with the US contributing 60-70%. Other key export markets include Japan and Italy.
Export strategies
He said the government has made efforts to explore new markets for Thai furniture exporters.
However, as the number of players increases, some suppliers may use aggressive pricing strategies to penetrate these new markets, said Mr Jirachai.
While seeking new export markets, he said the government should not overlook the existing ones, which still possess significant trade value and strong growth potential.
As many exporters rush to find new markets and may weaken their ties with the US, Mr Jirachai said Thai producers should strengthen their presence there.
Some US importers may be open to new trade deals, which he views as an opportunity for Thai exporters seeking new partnerships.
Mr Jirachai also urged the government to broaden opportunities for Thai exporters beyond traditional trade shows, suggesting participation in more specialised fairs such as those in the hotel industry, enabling them to reach potential customers directly.
In terms of long-term support, he called on the government to consistently strengthen national branding efforts, supported by certifications that assure the quality of Thai products, such as the Thailand Trust Mark (T Mark).
As consumers become more conscious of sustainability, the government could assist small entrepreneurs by launching sustainable or low-carbon industry certifications, said Mr Jirachai, enabling small local brands to enhance their business potential among customers seeking verified sustainable products.
More imports
As upholstered furniture is subject to a 25% tariff from the US, he said he expects exporters in this category to explore alternative markets, including Thailand.
While it is difficult to predict the impact on Thai furniture manufacturers, some local producers have transformed into importers of such products.
Mr Jirachai said most of Deesawat’s products are likely to face a 10% tariff as exports mainly consist of outdoor wooden furniture.
He predicted some importers may absorb the costs though others will not, leading to price increases.
This could be an opportunity to introduce a new product line with adjusted pricing that includes costs related to tariffs, which may attract a new segment in the market, said Mr Jirachai.
Moreover, the company is looking to reach end customers directly, facilitating import processes for them.
While product design for direct consumers will differ from those for US original equipment manufacturers, the company is well-positioned to innovate and adapt as it has in-house design teams, he said.