Supply Chain Report – 10/07/2025
US-China tariff policy in 2025 reflects a complicated network of overlapping duties and temporary measures. From product-specific levies to broad reciprocal tariffs, the system is fluid—and its effects on trade remain under intense scrutiny. Below is a detailed, up-to-date breakdown of the key tariffs in place and how they interrelate.
New Wood-Product Tariffs Announced
- On September 29, 2025, the US administration enacted tariffs targeting wood product imports. These include:
• A 10% tariff on softwood timber and lumber
• A 25% duty on certain upholstered wood furniture, as well as on completed kitchen cabinets and vanities - These new tariffs take effect October 14, 2025.
- Unless trade agreements are secured, the rates are scheduled to rise beginning January 1, 2026:
• Upholstered wooden furniture may increase to 30%
• Kitchen cabinets and vanities may climb to 50% - The new duties are designed not to stack on top of reciprocal tariffs, but they will stack with existing Section 301 and fentanyl-related tariffs.
Layered Tariffs: Section 301, Fentanyl, and Reciprocal Duties
- Section 301 tariffs, instituted in earlier years to address trade practice concerns, remain in force and cover a broad array of goods (chemicals, machinery, electronics, vehicles, etc.).
- The fentanyl tariff, currently at 20%, applies broadly to imports from China (subject to some exclusions) and continues to stack with other duties.
- Reciprocal tariffs—also known as “Liberation Day” tariffs—were originally imposed at high levels but have been reduced under truce agreements. Most notably, a reduction to a 10% rate is currently in place under the ongoing tariff truce.
2025 Tariff Truce and Temporary Relief
- In August 2025, the US extended its tariff truce with China by an additional 90 days, pushing the expiration to November 10, 2025.
- Without that extension, reciprocal tariffs on Chinese goods could have jumped to 145%, with Chinese counterduties potentially rising to 125%.
- Under the truce, reciprocal tariffs are capped or reduced (e.g. to 10%), but many products still face significant total duty burdens due to stacking with other tariffs.
Import Data & Impact Indicators
- In 2024, US imports from China subject to the new wood tariffs included an estimated USD 30.7 billion in softwood products, USD 1.8 billion in upholstered furniture, and USD 1.9 billion in kitchen cabinets and vanities.
- US furniture imports from China have already declined sharply:
• First half of 2025: down 22.2% compared to same period in 2024
• June 2025 alone: down 53.4% year-over-year
Tariff Categories & Stacking Rules in 2025
Here is a snapshot of major active tariff lines and how they interact:
| Tariff / Program | Rate(s) | Goods Covered | Notes on Stacking / Interaction |
|---|---|---|---|
| Wood product tariffs | 10% (softwood); 25% (upholstered furniture, cabinets) | Wood products | Will stack with Section 301 & fentanyl, not reciprocal tariffs |
| Section 301 | 25% (on various pre-designated lists) | Wide range of goods | Stacks with other applicable tariffs |
| Fentanyl tariff | 20% | Imports from China | Applies broadly, stacks with other duties |
| Reciprocal (Liberation Day) | 10% under truce | Broad categories | Many reciprocal tariffs temporarily reduced |
| Section 232 & MFN / metals / autos etc. | Varies (e.g. 50% on steel, aluminum derivatives) | Metals, autos, appliances | These also apply and may stack unless exclusions apply |
Strategic & Market Implications
- The expanded tariff measures reinforce the US policy direction toward reshoring critical production and reducing dependence on imports.
- Companies that import furniture, wood goods, or components from China may face rising cost pressures, supply disruptions, or sourcing shifts.
- The tariff truce provides temporary relief, especially for sectors relying on predictable import costs during the holiday and year-end periods.
- Negotiations remain a central feature: the ability of governments and companies to reach trade agreements or secure exemptions will shape how burdens evolve in 2026.
What to Watch Going Forward
- Whether countries can strike trade deals to avoid escalation of the new wood product tariffs starting in 2026
- The outcome of the announced US investigation into furniture imports (expected within 50 days)
- Further extensions or revisions to the tariff truce past November 2025
- How importers, especially in furniture, woodworking, and related sectors, adjust supply chains and sourcing
- The cumulative effective tariff rate on Chinese products, given continued stacking of multiple duties
The US-China trade tariff environment in 2025 is no longer defined by single headline rates. Rather, it is shaped by a complex system of overlapping measures, temporary agreements, and scheduled escalations. As the landscape continues to evolve, businesses, analysts, and policymakers must navigate a web of interlocking tariff dynamics.
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