US tariffs squeeze Canadian cabinet makers facing doubling of Trump duty

Alain Ouzilleau, a veteran of the Canadian kitchen cabinet industry, faces an uncertain future as US tariffs on Canadian cabinets are set to double to 50% on January 1, 2027. Cabico, a Quebec-based company that once shipped 90% of its products to the US, now considers moving production to the United States to avoid the increased costs.

The kitchen cabinet industry, a key part of the broader softwood lumber sector, is particularly vulnerable to tariffs alongside steel, aluminum, and automotive manufacturing. Unlike other sectors, cabinet makers are often overlooked in tariff discussions, making the industry even more exposed to rising costs and falling orders.

Despite Canada's economy growing modestly, the uncertainty has had a devastating impact on small businesses. Cabico invested roughly C$30 million to expand capacity and automate processes, only to see volumes shipped to the US fall by 25% from 2024 levels and lay off over a quarter of its workforce. The tariffs, implemented by President Donald Trump, have forced companies like Cabico and Muskoka Cabinet to explore US partnerships for production.

Muskoka Cabinet has already cut 40% of its staff and is operating three days a week, while the company's margins have shrunk considerably.

The Canadian government has provided temporary relief through a provisional safeguard measure, a 25% surtax on imports of certain wood cabinets and vanities for up to 200 days. However, the measure has not stemmed imports, and many cabinet makers want a duty of at least 100%. The US and Canada are in talks ahead of the US midterm elections, with the tariffs proving unpopular in several battleground states.

Despite the efforts to keep US customers and retain skilled labor, the future of the Canadian kitchen cabinet industry remains uncertain.