THE 25% tariff on Malaysian exports to the US has certainly given local furniture makers, who were already suffering from earnings contractions since the Covid-19 pandemic, the jitters. Industry players are crying foul over what has been described as an “abrupt and severe measure” by the Trump administration.
The US is the largest export market for Malaysian-made furniture. According to data from the Malaysian Timber Council, exports of wooden furniture to the Americas totalled RM5.71 billion in 2024, representing 57.8% of total wooden furniture exports.
“This abrupt and severe measure will have a far-reaching impact across all Malaysian [furniture] businesses exporting to the US, which has long been one of the nation’s key export markets. The recent tariff hike is not merely a tax increase; it represents a direct blow to Malaysia’s credibility and competitiveness in its largest export market,” the Malaysian Furniture Council says in a press statement.
The council warns that the tariff will likely trigger a collapse in orders, shrinking production capacity, lay-offs and a surge in business closures. Many of its member companies, says the council, have already encountered order cancellations, with buyers now sourcing from other countries.
In the Southeast Asian region, manufacturing powerhouse Vietnam averted a potential 46% tariff proposed earlier, which has now been lowered to 20%, while Indonesia clinched a deal with the US last week that will see a 19% tariff on imports to the country.
Vietnam and Indonesia are indeed close competitors to Malaysian wooden furniture makers to the US.
That said, the tariff situation is fluid at this point, with the Malaysian government working on further negotiations with the US in hopes of lowering the rate from the announced 25%.
Although not all Bursa Malaysia-listed furniture manufacturers have significant exposure to America, most of their share prices have been trending lower, suggesting other factors have exerted selling pressure besides the US tariff concerns.
The furniture industry had earlier been struggling with lower sales volume since the pandemic era, as elevated inflation and high borrowing costs eat into consumer spending of such discretionary goods.
Ecomate Holdings Bhd,whose listing was transferred to the Main Market two years ago, is one such manufacturer that has bucked the trend. Its share price has climbed 50% year to date. In fact, the stock has been on an uptrend over the last one year, gaining 68.6% during the period. It closed at RM1.45 on July 16, valuing the company at RM519.1 million.
Ecomate, which produces ready-to-assemble furniture, derives only 10.7% of its total revenue from North America whereas the larger portion comes from Asia, excluding Malaysia, at 40%, according to its 2025 Annual Report. However, like its peers, Ecomate’s earnings have not been spared from the slowdown that the furniture industry is currently facing. Its revenue has fallen 1.5% from RM51.37 million in FY2023 to RM50.57 million in FY2025. Net profit has shrunk significantly by 76% from RM6.17 million in FY2023 to RM1.47 million in FY2025 as the effective tax rate increased in FY2024 and FY2025 compared to FY2023.
Notably, Ecomate has proposed bonus issues of shares and warrants. It is also diversifying into the information and communications technology (ICT) business by acquiring a 60% stake in Progressive Computer Systems Sdn Bhd for RM8.4 million.
Out of the 10 furniture stocks reviewed, the following five have derived more than half of their revenue from the US.
Source: theedgemalaysia