IKEA CEO Warns of Tariffs Impact on Prices
Jesper Brodin, CEO of Ingka Group, the company behind IKEA furniture stores, has cautioned that tariffs will make it harder for IKEA to keep its prices low. The warning comes as the United States has announced plans to impose significant tariffs on imports from Mexico, Canada, and China.
“We have never experienced a period of benefit when we had high tariffs,” Brodin said in an interview with CNN. “But it’s beyond our control. We will need to understand and adapt.”
IKEA, which gets 70% of its goods from Europe and 30% from Asia, primarily China, believes that tariffs will increase production costs and potentially lead to price hikes. “Tariffs make it more difficult for us to maintain the low prices and be affordable for many people, which in the end is our goal,” Brodin explained.
The concern over tariffs comes as a growing chorus of business leaders have sounded the alarm on the potential impacts of Trump’s import levies. Tom Madrecki, vice-president of campaigns and special projects at the Consumer Brands Association, which represents Coca-Cola, General Mills, and others, has called tariffs a “clear and present danger” to his members.
While IKEA has long-term relationships with its suppliers and has adapted to market fluctuations, it is yet to decide on whether to relocate any production in light of the tariffs. Last year, the company reduced prices on roughly 2,000 products to cushion the impact of inflation on its customers.
The announcement is timely as IKEA opens a new pop-up shop on London’s Oxford Street, offering a preview of its plans for its forthcoming permanent store, set to open next spring.
