Trade tariffs make it harder to keep prices low, IKEA executive says

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Business

Posted By Jessica Weisman-Pitts

Posted on November 27, 2024

Trade tariffs make it harder to keep prices low, IKEA executive says

By Helen Reid

LONDON (Reuters) – Tariffs planned by U.S. President-elect Donald Trump will make it harder for IKEA to keep prices low, the chief financial officer of the world’s biggest furniture retailer told Reuters on Wednesday.

Trump has pledged big tariffs on imports from the United States’ three largest trading partners, Canada, Mexico and China, causing concern among governments and companies whose supply chains depends on smooth global trade.

Some 30% of IKEA products are sourced from Asian countries including China, with 70% coming from Europe, said Ingka Group CFO Juvencio Maeztu, adding that the biggest IKEA retailer is “closely following” news on tariffs.

The U.S. is IKEA’s second-biggest market globally, accounting for 13.2% of sales in its 2024 financial year.

For us, trade barriers around the world, whether it is from one country or another country, are limiting the possibilities to make things more affordable for the many people,” Maeztu said.

We will keep working with governments and with our supply chain to try to mitigate the impact and to hope to secure affordability.

IKEA, which sells $69 bookcases and $299 sofas, cut prices in 2024, attracting more shoppers but causing revenues and profit to drop.

Asked about the possibility of Trump’s administration slapping tariffs on products from Europe, Maeztu said it was best not to speculate but he would be watching developments over the coming months.

(Reporting by Helen Reid. Editing by Jane Merriman)

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