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Swedish retailer Ikea, known for its low-cost business model, is raising prices as a result of a new round of tariffs affecting the furniture business.
Tolga Öncü, store manager at Ingka, which operates many IKEA stores around the world, told the Wall Street Journal that the company had to adapt to the new business environment, ”
“We will not remain unprotected to cover all costs ourselves,” he told the outlet. “But the biggest task remains in finding ways to lower prices.”
While Öncü mentioned the company’s desire to reduce costs, he admitted that it is difficult, if not impossible, to do so in the current business environment.
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President Donald Trump announced last month that the administration will impose tariffs on the import of timber, timber and their derived products (wood products) to protect the American industry and protect the Oct. 14.
Customers shop for furniture at the IKEA store in Emeryville, Calif. (Justin Sullivan/Getty Images/Getty Images)
A 10% fee is imposed on softwood imports, while a 25% fee is reserved for imported high-end furniture and kitchen and bathroom cabinets. By Jan. 1, furniture prices will rise up to 30%, and those on cabinets / although they will go up to 50% unless the exporting countries negotiate.
Fox Business has reached out to Ikea for comment.
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The company is exposed to US tariffs because it is highly dependent on imports. Ikea Ikea Group said in the 2024 report that the majority of IKEA products, about 90%, are obtained from external retailers around the world.
The company is exposed to US tariffs because it is highly dependent on imports. (Justin Sullivan/Getty Images/Getty Images)
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In order to keep prices stable, the company is focusing on reducing operating costs, the executive told the magazine. However, some categories have already been affected by higher costs. For example, the cost of some sofas has increased by about $50, while the cost of a bedroom has increased by about $100 in recent months.
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During that time, the company has been increasing efforts to produce more products at risk. It has already sourced all of its kitchen cabinets for the US market at risk and is looking for additional products, such as mattresses, from local suppliers, according to ÖNCÜ.
To keep prices strong, the company is focused on cutting operating costs. (Justin Sullivan/Getty Images/Getty Images)
This news is the person facing it from March 2024, when the company announced that it will continue to cut prices in the US as the inflationary pressures are free.
The company has been cutting prices on products in several countries throughout the year and 202 as Travel expenses and raw materials exposed.
Companies that may have received relief from years of high-profile disputes are now trying to minimize the impact of the tax on their business.
