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Swedish furniture giant Ikea It has become the latest business to warn that undermining the president’s influence could force him to raise prices for US consumers donald trumpTariff schedule of.
The home furnishings brand was founded in 1943 by Ingvar Kamprad and has since centered its offering around a “democratic design” ethos, emphasizing attractive, functional and affordable goods.
But its values are being tested by Trump’s aggressive levies, given that it relies heavily on imports into North America, with only 15 percent of its US products sourced regionally.
Luckily, its kitchen cabinet range falls into that category, saving it from President Recently there has been a 25 percent increase targeting that areaHowever, this is likely to prove only minor consolation.
“Our ambition is to continue to lower prices,” said Tolga Onku, retail manager at Ingka, the company that operates most of the Ikea stores around the world. told wall street journal“We will have to pass some of the cost increases on to customers.”
“These tariffs are confirmation that we are on the right track when it comes to exploring more manufacturing opportunities in the United States,” he said diplomatically.
“We cannot be immune from bearing all the costs ourselves. But the bigger task is to find ways to reduce prices.”
Onku said the company is working hard to cut operating costs, but ultimately, it can only go so far in this direction.
Ikea’s overall retail sales meanwhile fell for the second year in a row, falling 1 percent or $52 billion for the year ending in August, according to WSJWho can force his hand. The company’s full results for the financial year are due next month.
The newspaper says the price of the company’s Uppland sofa has already risen from $849 to $899 this summer and the price of its three-piece oak bedroom set has risen from $959 to $1,049 as of August.
Independent Ikea, the White House, and the Treasury Department have been contacted for further comment on the situation.
Compounding the problem, the average amount spent by American households on furniture fell dramatically in 2023, the most recent year for which data is available, from recent highs of $715.60 in 2021 and $746.46 in 2022, to just $618.65. according to Politician,
This is almost certainly attributable to the pandemic’s aftermath inflationWhile prices of everyday essentials remain high, households are cutting back on unnecessary purchases. This is the issue that many people voted for Trump to solve.
The downward trend is also likely to continue, given that US furniture prices were up 4.7 percent year-over-year in August.
If Ikea is ultimately forced to raise prices in response to the tariffs, it will by no means be alone. choice of wal-mart, Target, And home depot are already warned that they may have to take action They face adverse circumstances.
Trump reacted sharply to such statements and told Walmart, the country’s largest retailer, that it must do so. “Eat Tariff” In a May Truth social post, ordering him to stop blaming his trade war for his decision to raise prices, he said in a threatening tone: “I’ll see, and so will your customers!!!”
Walmart and Target employees reacted by posting on Reddit They faced price increases in stores He believes these are directly responsible for the President’s tariffs.
As the Christmas season approaches, those same businesses have expressed concerns that the ongoing economic uncertainty could increase adverse effects Holiday Hiring PracticesWhich means fewer people will be taken on in a temporary capacity.
investment bank Goldman Sachs It is estimated that American consumers will ultimately pay 55 percent of the tariff cost, with the rest falling on American companies and, to a greater extent, foreign exporters.