Walk into Pearl River Mart in Soho and the store is a sensory marvel of imported goods that could fill a home — colorful cups and bowls, teapots, paper lanterns, vases and ceramic figurines. There’s the paper lantern a shopper might impulsively buy on a Sunday afternoon, or the wok and spatula waiting to stock a new apartment. About 65 percent of the merchandise comes from China.
With Chinese tariffs up 145 percent, with a few exceptions, since President Trump took office, stores that sell imported home goods, often the guilty pleasures shoppers buy on a whim to bring a little charm into their homes, are especially vulnerable to the rapidly changing tariff policies. While the president paused many of his sweeping global tariffs on most countries for 90 days, a 10 percent universal tariff is still in effect, as are 25 percent tariffs on some Canadian and Mexican goods.
As merchants decide whether to absorb the costs of tariffs or pass them along to their customers, those selling the stuff that makes a home homey — throw pillows, lamps and picture frames — will soon have to decide how much more shoppers are willing to pay for items they don’t necessarily need.
“One hundred percent of our goods are nice-to-have goods, not need-to-have goods,” said Joanne Kwong, the president of Pearl River Mart. “You’re going to need to pay the rent and feed the kids before shopping with us.”
In an earnings call in March, Laura Alber, the chief executive of Williams-Sonoma, the parent company of Pottery Barn and West Elm, told investors that “headwinds” from tariffs on Canada, China and Mexico could push down the company’s margins. The company imports almost 25 percent of its goods from China and said it would selectively increase prices for consumers. Another high end furnishing retailer RH, formerly Restoration Hardware, is holding off on raising prices even as its stock falls. As of April 10, its stock had dropped 26 percent from the previous month.
The home décor industry boomed during the Covid pandemic, when millions of Americans were stuck at home and looking for ways to make their spaces cozier or furnishing the new houses they bought when interest rates were low. But as inflation drove up prices and rising interest rates froze the housing market, housewares took a hit. With fewer people buying homes, there was less need to decorate.
The threat of tariffs adds more uncertainty to an already uncertain sector because if consumers are paying more for everything from coffee to refrigerators, they might hold off on buying a wicker basket, especially if it costs substantially more than it did a few months ago.
“Raising prices is hard enough in a good environment,” said Simeon Siegel, a senior analyst for BMO Capital Markets. “Where do people close their wallets first? Fixing a house can become a very discretionary purchase.”
As shoppers look for deals, they may turn to discount retailers like HomeGoods and Homesense, both owned by T.J. Maxx, which snatch up the stuff the other stores can’t unload and resell it at a deep discount. Because these retailers are largely buying merchandise already in the United States, they avoid paying the tariffs. “They thrive on buying other people’s mistakes,” Mr. Siegel said.
Ms. Kwong at Pearl River Mart doubts she can raise prices on customers who already come to her store looking for unique, reasonably priced items for the home. Typically, she doubles the price of the goods she imports, selling a $5 imported bowl for $10. But under the current tariffs, that would mean charging $24.50 for the bowl, a price few of her shoppers would accept.
She has an order ready to leave Shenzhen for New York and is trying to negotiate with her vendor. “How do you negotiate a 145 percent tariff?” she said, adding that she has stopped placing new orders from China until she has more clarity on the tariffs. She will likely absorb as much of the added costs as she can, reduce staff hours or scale back the community events the company sponsors.
The company, started by her in-laws in Manhattan’s Chinatown in 1971, has been struggling against inflation, high rent and the slow pace of sales since the pandemic. It might not be able to weather another hit, potentially forcing the company to close one of its three locations or even its entire operation. “At a certain point, you have to reach a decision: Is it all worth it?” Ms. Kwong said. “For many of us, this is going to be the last straw.”
For some home décor purveyors, the consequences will be more subtle. At Manse, a housewares store in a rowhouse on a cobblestone street in Washington’s Georgetown neighborhood, shoppers can browse for ceramic vases, woven baskets, wooden bowls and candles. Adam Howley, who owns the store with his husband, Andrew Coon, buys the goods from artisans in the United States and countries around the world including Japan, Portugal, Vietnam, India and Denmark. For now, his vendors abroad are absorbing the tariffs, but the uncertainty makes it hard to plan.
“There is a lot of unease at the moment because we’re not able to predict what the next days, weeks, months may hold and that makes it a bit challenging to plan,” he said. Rather than raise prices, Mr. Howley said he may have to ultimately stop ordering some items, particularly products from the European Union and lacquered goods from Vietnam. “Because we work with artisan makers, there is not a direct replacement,” he said.
In Cedar City, Utah, Devanie Adams doubts her home décor business could survive high Chinese tariffs if they last longer than a year. Ms. Adams and her husband, DJ Adams, started Adams & Company in their garage in 2003, designing and making wooden blocks, shelves and decorative signs, and selling their creations to retailers. While the merchandise is still designed in Utah, it’s now manufactured in China. Retailers placed orders for seasonal décor — a big part of the company’s merchandise — in January.
On April 10, Ms. Adams was on the phone with her vendor in China, trying to decide if she should give the factory a greenlight to process those orders. If the orders aren’t placed in the next two weeks, they won’t arrive in time for the December holiday season. Some of her retailers have already delayed or canceled orders, while others have told her that they will cancel if the prices rise. If the tariffs remain in place, “my business cannot survive,” she said.
“You feel a little bit like the sacrificial lamb,” she said, as a smaller company dependent on Chinese manufacturing, “we will be the ones to suffer the consequences.”
