How Import Tariffs Impact the Cost of Window Treatments
Tariffs can have an impact on several areas related to the manufacture of all types of window treatments including roller shades, solar shades, sheer shades-sometimes called zebra shades, honeycomb shades, curtains, wood blinds, and shutters. Here are some of the key impacts:
Increased Production Costs: If tariffs are imposed on raw materials, such as fabrics, metals, or plastic components imported from other countries, manufacturers will face higher costs. These increased costs can either reduce profit margins or force manufacturers to raise prices for retailers like Mix, who may pass these increased costs on to end-consumers.
Supply Chain Disruptions: Many window treatment manufacturers rely on global supply chains for materials and components. We saw this during the pandemic when ships were stranded in the San Francisco Bay carrying needed parts such as aluminum roller tubes, metal shade brackets, metal fascia systems and the basic fabric used particularly for roller and solar shades. Tariffs can disrupt these supply chains, leading to delays or shortages of critical materials. The impact during the pandemic was to increase the production timeline from what is typically 3 weeks up to 8 weeks or sometimes an unpredictable time due to the shortages all along the manufacturing supply chain.
Manufacturing Cost Increases: If manufacturers pass on the increased costs from tariffs to their retail customers like Mix, it is likely that small retail businesses will not be able to absorb these costs and will pass them on to consumers. This could make them less affordable for customers on a tight budget and potentially reduce overall demand.
Raw Materials and Components: If you “deconstruct” your window coverings, you’ll be surprised by the number of small components required to make the shade operate. For example, there are four parts used to make a nice fabric wrapped hem on your roller shade including a special tube with a channel for the fabric, end caps and an inside clip. Imagine the time required to find a new source in the U.S. to make all these specific parts for each type of shade? It’s unlikely production of all these components will move to the U.S. anytime soon.
Motorization components for Lithium-ion Battery operated treatments: Most batteries and related remote controls, chargers, wifi bridges, etc. for motorized blinds, shades and draperies are made offshore.
Fabrics: The various fabrics used for all types of shades such as cotton, polyester, linen, and specialty materials like fused blackout materials have been produced offshore after U.S. fabric manufacturers began shifting production overseas in significant numbers starting in the 1970s and 1980s, with a marked acceleration in the 1990s. Several factors contributed to this trend:
Globalization and Trade Policies: As international trade agreements such as the North American Free Trade Agreement (NAFTA) in 1994 and the establishment of the World Trade Organization (WTO) in 1995 reduced trade barriers, it became easier and cheaper for U.S. companies to outsource manufacturing to countries with lower labor costs.
Other Considerations:
Increased cost to the end customer:
In 2019 our manufacturer partners imposed a retail price increase in the cost of roller and solar shade products due to the tariffs imposed by the US on China for any imported parts or finished products. This price increase of 10-12% was then built into our wholesale costs and in turn passed on to the consumer through our retail prices. This tariff surcharge has never been eliminated, and any additional tariffs imposed now will just get added on top of these.
Increased Cost of Labor or Overhead: Manufacturers may try to shift production to domestic facilities or other countries to avoid tariffs, but this could involve substantial costs for relocating operations or upgrading local infrastructure. This will not make U.S.-made products cheaper.
Humans make your shades and draperies: While “made in America” always sounds terrific, we have become accustomed to low prices that are in part a result of lower labor costs in Mexico and China where components are sourced and some items such as fabrics are manufactured. Today’s news is full of stories about inflation, the cost of living in the U.S and complaints about low wages. Moving these jobs back to the U.S. would potentially stabilize the cost of your new shades or draperies, but building the workroom facilities and training skilled employees won’t happen overnight. . Here is a photo of a workroom in the U.S. that made fabric roman shades and drapes:
Unfortunately, this workroom closed in 2018 due to the continued increases in labor costs, sophisticated manufacturing equipment, and a demand for variety in stocked fabrics. As you can see in the photo, this job requires trained sewers and machine operators to do the work – and the work is physically demanding. For all these reasons, it’s likely that the offshore manufacturing and sourcing of parts and fabrics to make window treatments will not move to the U.S. anytime soon.
Retaliation: If other countries retaliate with tariffs of their own, it might further disrupt global supply chains. For example, if the U.S. imposes tariffs on Chinese window treatments and China responds with tariffs on U.S. raw materials or other goods, it can create a complex web of pricing pressures on manufacturers and increase uncertainty in the industry.
Increased Legal and Administrative Costs: Compliance with tariff laws requires manufacturers to track tariff codes, provide documentation, and sometimes pay additional fees for customs clearance, which can add layers of cost and complexity to the process.
Audit and Enforcement Risks: With tariffs, there is often an increased risk of audits or penalties for non-compliance, which can add further operational costs for manufacturers who import goods.
What has been the result of the tariffs to date?
Over time, tariffs have and will continue to alter the structure of the window treatment industry:
Market Consolidation: Smaller manufacturers who have struggled to absorb the additional costs of tariffs have been forced out of business or acquired by larger companies. As this continues, we may be left with just a few large players dominating the industry. This has already started happening with the consolidation of two exceptionally large roller shade manufacturers. The result has been a reduction in the variety of options such as lift mechanisms and fabrics available to consumers.
Changes in Innovation and Product Offerings: With added pressure on prices and margins, manufacturers may become more focused on cost-cutting rather than innovation, potentially leading to a reduction in product variety or creativity in design.
Conclusion: Now is the time to order your new window coverings
While the intent of tariffs is to protect domestic industries, they bring along a range of challenges, including higher consumer prices and disrupted supply chains. As our valued manufacturing partners navigate these waters, Mix Montclair will always do our best to select the best workroom to produce your window treatments based on your budget, the type of treatments you want, and the features and functions required to make your project a success. Our first choice is always our local manufacturers and small local workrooms who do the highest quality work at the most reasonable prices.