i+D - November/December 2018 - 27

An Air of Uncertainty
Now, uncertainty hovers over the design community as it
maneuvers a forced separation with its biggest trading partner.
"Since joining the WTO in 2001, China has become the world's
workshop," notes Rossell. "There was a confidence in a stable
supply chain as China was integrated into the global economy."
The symbiotic relationship between the nations, one that played
out among the design community, has developed so that "the
[United States] is the source of ideas and innovation, and China
is the implementer of those ideas-the two economies married
themselves in that way," Rossell says. Now, with these tariffs,
"it's almost like a divorce."
The ripple effect is that prices are going up "for every single
input in the interior design and real estate process, at every single
point in the supply chain," from fabric costs to all that goes
into renovating and outfitting a home, like the 13 percent price
spike in washing machines. And, as steeper tariffs on Chinese
imports will be levied come January, the design community is
preparing for what those increases might bring as there tends to
be a lag effect, states Rossell. As a result, a range of contracts
tied to design projects, from the factory and the wholesaler to the
architect and interior designer to the client, will be renegotiated,
"and they'll write in contingencies [anticipating] changes to
occur in the future."
Tom Stringer Design Partners already is doing just that, adjusting
project meetings and completion dates, as raw material prices for
both furniture, fixtures, and equipment (FFE) and construction
materials are of concern, explains John Cialone, partner and vice
president of the firm, who also serves as president of the Illinois
chapter of the American Society of Interior Designers (ASID-IL).
"We have received notices from many of our vendors, both small
and large, that they are increasing prices or we should expect
price increases in the near future," he says. As a result, "I've
encouraged some clients to purchase some specific items and
larger-scale purchases so that passed-along increases don't affect
their project." In anticipation of a 15 percent price surge from
a lighting vendor, for example, the firm advised one client
to purchase a fixture earlier than planned to skirt the hike.
"Design clients are following these issues as it relates to
the bigger picture in the economy and their personal [financial
standing]," notes Cialone. So, while they're noticing that their
401k is up, "they're also noticing [the price of] raw materials
and goods are up."
While Tom Stringer Design Partners hasn't taken a business hit
from the tariffs just yet, "we are anticipating a potential decrease
in overall sales if people start to lose confidence," adds Cialone.
For its part, the firm is exploring local manufacturers that source
closer to home as one way to avoid the international tariffs.
Although local sources could become scarcer and pricier due
to higher demand, "we'd be supporting our local community,"
Cialone says.
http://www.asidinsurance.org/ http://www.tie-inc.com
i+D - November/December 2018

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