While U.S. and Canadian trade relations have not always been perfect, the past year has been particularly rocky. Cabinet company president, Muskoka Cabinet Company, and vice president of the Canadian Kitchen Cabinet Association, Luke Elias, opens up about the current state of U.S., Canadian relations. 

A relationship that has recently been strained by proposals to impose 25% tariffs on Canadian cabinet exports to the U.S. starting Oct. 14, and a doubling to 50% on January 1, 2026.

Q. Looking at the U.S./Canadian relations, is it more contentious in 2025?

A. Yes, I think it's accurate that it definitely is a little more contentious in 2025 than in the past.
 

Currently, we have the CUSMA (Canada-US-Mexico) trade agreement that is still in effect. I know that [in the past] there have been difficulties coming to an agreement on trade negotiations. There have been instances now and again in some industries where we argue, but it always seems to get resolved. But [those disagreements] are nothing to the extent of tariffs like 50 percent. I mean this is the first time we've ever seen anything like this.

Q. What will these proposed tariffs mean for the Canadian cabinet industry? 
A. This news will devastate our industry. We're a $4.7 billion dollar industry in Canada. We export $600 million to the US, so that's quite a large percentage. 

In addition, we are facing a soft housing market just like the U.S.

Back in 2019, when cheap imports were being dumped into the U.S., the US put tariffs in place against the dumping. These [offending] countries set their sights on other countries like Canada. So, just like in the U.S., subsidized cabinets are being dumped into Canada at a rate that's increasing at 20% per year.

And now, almost overnight, we literally could see $600 million worth of business dry up. 

Q: What can the Canadian cabinetry do about it at this point? 
A. There's three things that we are looking to have done.

We know that the American Kitchen Cabinet Alliance sent a letter to the U.S. government asking [for help]. They [U.S. cabinet makers] are tired of this dumping into the U .S. What happens is they get sanctions, tariffs, against one country, and then those countries go around them by shipping to other countries, and then exporting cabinets from there to the U.S. to skirt the tariffs. So, they asked for aid. In the letter they sent to the U .S. government, they listed countries that they want tariffs placed on, and they left Canada off the list. So, number one is, you know, we want to reach out to your associations and ask them if they have any influence or have a direct line to your government to find out why Canada was added to the list.

The second thing is, our government last week announced a $13 billion dollar fund called Build Canada, a housing initiative to build houses in Canada. We've released a statement asking our government to put in provisions that if you, [the developer], qualify for any incentives, or government grants, or any money coming from the government to build homes,] that they must buy Canadian cabinets. We feel that's something that should be done and can be done today.

And number three, we're going to ask our government to do what the KCMA or the Cabinet Alliance has done in your country. Launch a trade dispute with those countries [dumping products into Canada]. Those disputes costs millions of dollars, and we don't have the capacity to do that ourselves.

Q: I always thought of the cabinet industry in the two countries as a community. Business competitors, yes, but a community. Was I naive thinking that? 
A. No. It is a community; did you know that we are hosting 250 members of the Kitchen Cabinet Manufacturers Association for a factory tour as part of their Fall conference [being held in Montreal]? We welcome them [despite the tariff issue]. 

Q. What about your members' U.S. customers? I would think that they're not particularly happy.
A. The members of our association that I have spoken to that have a significant customer base in the U .S. have indicated their customers are saying “We're sorry this is happening to you." I know that they are negotiating how to get through it. At least for the first part, the 25% [tariff rate] that goes into effect October 14, there may be a way for the supplier in Canada and the customer in the US to sort of mitigate that rate. But, 50% no, and that hits January 1st, There's no way that they will able to get past that. That is what our members are saying.

Q. Do you think that would lead to sort of worker layoffs, companies closing in Canada? 
A. Absolutely. All the above. 

I'm also worried that the companies in Canada, especially major companies exporting to the U.S. that they are going to go to make up that $600 million that they export to the States by coming after my business. So, it's going to affect the majority of the cabinet manufacturers in Canada. Whether they export to the U.S. or not, it will affect them.

We were talking to one of our members this morning, 70 % of their business is in the U .S. and they're huge, and they have 500 employees. They're not going to shut down. They're going to try and make up that business. They're going to go after whatever they can to survive. So, this is why it's devastating news for our industry.

Q:  What would you like to tell my readers in the U.S. and Canada something that they may not know or not considered?
A. I just want to reiterate that [our two counties] are on a level playing field. Canada and the U .S. are on a level playing field. We have strict labor laws, overtime laws, benefits that we pay our employees, just like you do in the United States. So, we are not dumping products. We're not a threat. We're small potatoes, and we are not dumping product into the U.S. that's subsidized.

I've read on social media platforms comments being made by cabinet manufacturers in the U .S. who are really happy that the U.S. government is looking out for their best interest because they have been hurt by the soft housing market, by imports being dumped into the U.S., and so you can't blame them. We don't blame them.

But, what we have to keep saying is that we are not one of the offenders. We are not dumping into your country. We are on a level playing field. Our customers in the U .S. are buying from us not because we're a cheap import, for them it's just another product line that they appreciate. The customers are not buying our product because we are dumping into your country. Canadian [cabinetry] has a reputation of quality and service. 

We're not the enemy.