BY NKBA Editorial Staff
As federal tariff and trade policies take their final form, their impact on kitchen and bath companies—and on consumers—is becoming clearer.
A recent analysis from Goldman Sachs asserts that U.S. businesses have, to this point, shouldered most of the financial impact from tariffs, but this may change soon. The report projects that consumers will have to absorb a larger share of tariff costs, as U.S. businesses and foreign exporters can no longer shoulder the majority of these expenses.
Here are some additional insights into the expected impacts of tariffs from the NKBA / John Burns Q2 2025 Kitchen & Bath Market Index (KBMI) Report and the mid-year update to the 2025 Market Outlook:
K&B Industry Expects Tariffs to Restrict Growth
When asked what factors they expect to restrict growth in the short term, more than half (52%) of K&B industry pros surveyed as part of the Q2 2025 KBMI said that tariffs will constrain revenue growth over the next six months.
Several firms noted that higher prices from tariffs likely won’t reach consumers until 2026.
Tariffs are impacting margins
Margins were down in Q2 2025, likely influenced in part by increased tariffs. A quarter of surveyed K&B professionals said gross margins were down year-over-year, up five percent from Q1 2025. Design (29%) and manufacturing (27%) firms reported lower gross margins YOY, reflecting elevated margin pressure in those sectors relative to the broader K&B industry.
More than half of manufacturing segment firms providing tile, appliances, faucets, and hardware reported experiencing margin pressure and plans to either partially or fully pass along price increases.
“Path of Uncertainty”
In the Kitchen & Bath Midyear Update on August 7, Nishu Sood, Principal of Research at JBREC, shared an updated macroeconomic forecast for 2025, analyzing policy shifts and their implications for the kitchen and bath industry.
Sood noted that the economy has held up better than expected over the first half of the year, yet uncertainty around tariffs appears to be weighing on economic growth, including a notable downshift on hiring. While inflation has fallen, it is still not at the level the Federal Reserve would like to see and consumers remain concerned about elevated prices.
While there has been a general sense that tariffs have not had much of an impact thus far, Sood says the situation is far from resolved. It will take some time – likely later this year or into early next year – to see the true effects of the historically high tariff rates that were recently announced.
“We have been waiting to see how across-the-board tariff increases would impact our industry, and we are finally seeing early indicators of how this may play out,” said Bill Darcy, Global President & CEO of NKBA | KBIS. “This information should inform the adjustments K&B professionals across sectors are planning as they look to adapt to changing economic realities.”
