Natalia Samodina, The Interior Design Lawyer and our legal columnist, explores how to rethink supply chains for 2026 and beyond.
The UK furniture industry faces an unprecedented convergence of challenges. Recent manufacturing research by Dun & Bradstreet (“DnB”) conducted among 2000 professionals in 5 key markets of US, UK and Europe reveals that 33% of manufacturing procurement leaders cite regulatory changes, particularly tariffs and sanctions, as their biggest supply chain obstacle. For British furniture, furnishings and flooring (“FFF”) sector, this convergence of adversarial trade policies and persistent logistics disruptions have created a perfect storm that continues to test its resilience.
The sobering reality? Most destabilising factors lie firmly outside our control. We cannot prevent conflicts from disrupting shipping routes nor influence tariff policies from Washington or elsewhere. What we can do is build protective layers around our businesses that cushion the blow when disruptions occur.
THE MULTI-TIER VISIBILITY CHALLENGE
Supply chains have become increasingly complex, yet visibility remains limited: according to the same DnB report, only 18% of manufacturers actively monitor compliance beyond Tier 3 suppliers.
The consequences are stark. 97% of firms have faced issues from complex supply chains, including quality control problems (31%), delivery delays (29%) and increased costs (29%). For FFF businesses sourcing internationally, this lack of deep-tier visibility creates substantial risk, particularly relating to the EU Deforestation-Free Regulation (“EUDR”) compliance requirements taking effect next month for larger companies.
The primary barrier is data: 39% of manufacturers report lacking information needed to monitor deeper supply chain tiers, whilst 41% distrust the data they do possess.
Overcoming this requires investing in digital traceability tools and third-party data providers to consolidate siloed systems. Yet only 50% of manufacturers currently do so (FFF examples include Hypnos and Benchmark).
RE-SHORING AND NEARSHORING: THE LONG GAME
For businesses with international supply chains, particularly those sourcing from Asia, the strategy centres on geographic diversification. DnB research shows 61% plan to nearshore or localise more than half their supply chains. The tangible benefits of reduced lead times and reduced reliance on unstable long-haul transport routes are thought to offset higher labour and material costs, thereby making the shift from globalised sourcing towards regionalisation gain momentum.
Regulatory incentives also play a role. Under the EUDR, sourcing from “low risk” countries like the UK and EU means lighter due diligence, lower compliance costs and fewer audits for the British FFF exporters.
However, this transformation requires patience. Only 8% prioritise nearshoring within twelve months, signalling it’s a strategic reconfiguration rather than a quick fix.
Where nearshoring proves unfeasible, offshore diversification remains critical. Vietnam has emerged as the world’s second-largest furniture exporter at nearly $17.6 billion annually, offering 30-40% lower labour costs than China, alongside high automation and sub-2% defect rates.
Yet caution is warranted. Roughly 70-80% of Vietnam’s timber inputs are imported, creating exposure to price volatility and regulatory concerns. As the name of the game suggests, businesses mustn’t replace over-reliance on China with over-reliance on Vietnam.
Other Southeast Asian markets are also gaining ground: Indonesia (teak and rattan), Malaysia (rubberwood and panel-based construction), Thailand (design-led hospitality furniture), and Cambodia, with projected exports of $1.48 billion by 2033.
Notably, all except Cambodia are classified as “low risk” under EUDR, offering regulatory advantages for British exporters.
BUILDING FOR LONGEVITY
Beyond geographic diversification, material diversification through recycled and reclaimed resources offers both environmental and supply chain benefits. The circular economy approach, emphasising durable designs, repairability and eventual reintegration into production cycles, reduces dependence on virgin materials subject to price volatility and supply constraints, additionally benefitting from an exemption from EUDR’s core due diligence requirements.
For FFF businesses, this philosophy translates into several concrete strategies.
Design for longevity: creating sturdy, modular, “smart” furniture reduces replacement cycles whilst appealing to environmentally conscious (and frugal) consumers. Interchangeable components simplify repairs and upgrades, whilst hybrid-space designs for use across work, leisure and family environments extend utility and lifespan.
Lifecycle services: offering refurbishment and repair services extends product life whilst generating new revenue streams. Implementing buy-back and resale programmes builds consumer loyalty during economically challenging times, reduces waste cycles and supports regulatory compliance.
Waste as resource: the capacity to repurpose production waste, transforming it into recycled material for future manufacturing or creating additional revenue streams, closes the loop on resource efficiency.
By designing products for refurbishment and resale, businesses create buffers against supply chain disruptions whilst not relying solely on manufacturing new items for revenue.
A LEGAL SHIELD
Protective contractual provisions provide essential risk management tools, working alongside operational resilience strategies.
For suppliersthree clauses deserve particular attention:
force majeure (events outside our control): it should explicitly cover government actions, including tariffs and sanctions, and give the right to suspend obligations without liability when circumstances genuinely beyond the supplier’s control make performance impossible;
price adjustment: given volatility in shipping, materials and regulatory costs, mechanisms tied to specific indices or triggered by defined events protect against unforeseen increases whilst establishing objective criteria to avoid disputes; and
limitation of liability: should cap potential exposure for delays or breaches from external factors; if proportionate, such clause can prove crucial in a B2B context, excluding liability for consequential losses from supply chain disruptions.
Buyers should focus on the following:
delivery terms: specify obligations precisely using appropriate Incoterms for international deliveries, whilst making sure that these align with related concepts, such as transfer of risk and insurance; and
liquidated damages: pre-agreed damage calculations for late or off-spec delivery provide certainty and avoid disputes; ensure amounts represent genuine pre-estimates of loss rather than penalties, which UK courts won’t enforce.
Finally, whichever side you are on – a buyer or a supplier – a comprehensive contract management and escalation clause can go a long way towards resolving difficulties of whatever nature, whilst preserving the relationship. I can’t emphasise this enough.
LOOKING AHEAD: 2026 PRIORITIES
Manufacturing procurement leaders are prioritising internal AI adoption and automation for the 2026 supply chain resilience strategy. However, foundational challenges persist: regulatory risks, supplier dependency and data quality concerns.
The protective layers that are built today, through geographic and material diversification, sustainable business models and robust contracts, will determine competitive advantages tomorrow. Whilst external forces remain beyond our control, preparation and strategic resilience are entirely within reach.
This article is for general information purposes only and does not constitute legal advice. If you would like specific legal guidance tailored to your particular circumstances, please email Natalia at natalia@interiordesignlawyer.co.uk.
