Hometextilestoday, New York – In less than two weeks, if nothing changes, goods from India entering the United States will be subject to a tariff of 50%. The current tariff rate of 25% took effect on August 7.
This additional tariff is being implemented as a penalty for India’s continued importation of Russian oil, according to a recent White House executive order. This measure is part of the US government’s efforts to pressure Russia in connection with the ongoing war in Ukraine.
Based on this information, some rug manufacturers are reaching out to customers with updates.
“Due to the recent escalation in tariffs for products imported from India, we have held our incoming shipments from India which affects handmade products,” said a message from Kas Rugs to its customers. “We hope to have more clarity on the situation in the upcoming weeks and will keep you updated as the situation changes. Reminder: With pricing increases on the horizon, now is the ideal time to stock up on in-demand collections for the upcoming season.”
Rug company Kalaty said its has absorbed the tariffs to date but told its customers, “Due to sustained tariff increases, we are no longer able to cover these expenses entirely.”
The company is offering no tariff fees on all orders placed before Aug. 31 with all back orders facing a 14% tariff fee. From Sept. 1 to Oct. 31 all new orders will also face a 14% tariff fee. After Nov. 1, the company will make decisions based on the current tariff rate at that time.
“Please rest assured that all prior orders will be honored at their original pricing. We also sincerely hope these tariff charges will not be permanent, and we will adjust our pricing if and when conditions improve,” the company said in a message to customers. “We understand that price changes are never welcome news. Please know this decision was made only after every effort to minimize the impact on our customers.”
Kalaty said its warehouse on Long Island, NY, contains a vast inventory of all products for customers to take advantage of the zero percent tariff fee until Aug. 31.
Other rug manufacturers see possible longer term changes ahead for the industry as a whole.
“The tariffs are likely to increase costs for importers, leading to higher prices for consumers and reduced product variety,” said Diana Samuels, director of operations for HRI. “This may slow sales growth and put pressure on smaller retailers and importers, while encouraging some companies to seek alternative suppliers or domestic production. Overall, the industry could face short-term instability and a more cautious market environment until tariff uncertainties are resolved.”
Chad Stark, CEO of Stark Carpet agrees that the short term may be challenging.
“At 10%, tariffs were manageable, vendors found ways to absorb some costs or make small operational tweaks. But at 25%, keeping prices steady is almost impossible, and at 50%, significant price increases are unavoidable,” he said. “Every vendor will be forced to raise prices, and for custom-focused boutiques, the hit is even harder: many have open orders that haven’t shipped yet, meaning the extra cost comes straight out of their pocket.”
Stark said that can wipe out profits overnight or force difficult conversations with clients to cover the difference and he said that with certain premium qualities like hand-loomed rugs, they are only made in places like India. There is no alternative supply chain to sidestep the tariffs.
In the long term though, most rug manufacturers think the industry will weather the storm.
“While the immediate effects may be challenging and will affect rug buying during the typically slow summer season, I believe that, eventually, the market will stabilize as these costs are passed on to consumers through price adjustments, and it becomes the norm,” said Cameron Capel, president of sales and marketing for Capel Rugs. “It’s a tough period, but I’m hopeful for a resolution that will mitigate the impact on our industry.”
Stark agrees that the industry has navigated major disruptions before. He believes the businesses that move fastest by finding creative ways to protect value will be best positioned to emerge stronger on the other side.
“Price increases will be felt across the board, and the added pressure will accelerate the consolidation already underway. Larger, well-resourced companies will have the resilience to absorb shocks, while some smaller, specialized boutiques may sadly disappear,” Stark said. “But we’ll also see new forms of collaboration like shared logistics, co-branded projects, and technology-driven reach that can help preserve the diversity and craftsmanship that make this industry special.”
HRI’s Samuels believes the new tariffs could reshape competition in the rug industry in a few ways: by offering an advantage for domestic producers, by putting pressure on small importers, and by a shift in market segments with low-and-mid range segments.
“They may face heavier competition from cheaper machine-made rugs, while high-end brands may compete more on design and exclusivity than price,” she said. “Companies that can maintain variety, quality, and stable pricing despite tariffs may stand out and capture market share. Tariffs could thin out weaker players and reward those who adapt quickly with smart sourcing and pricing strategies.”
The only other country to face tariffs at the 50% level is Brazil, which the administration says it is pressuring due to an ongoing criminal case against former president Jair Bolsonaro. The administration left open the possibility of reversing the tariffs on India if the country alters its behavior.