Ikea's tariff trouble: New U.S. trade policies pose challenges
Jasper Brodin, CEO of Ingka Group, admitted that the tariffs planned by Donald Trump's administration will soon negatively impact international trade. "It’s beyond our control. We will need to understand and adapt," Brodin stated.
In a conversation with CNN, Brodin mentioned that tariffs make it challenging to maintain low prices and product availability. "We have never experienced a period of benefit when we had high tariffs," he observed. The Ingka Group he leads is the largest franchisee of IKEA.
Brodin did not specify whether the company would shift production to other countries in response to the planned introduction of new U.S. tariffs. Currently, about 70% of IKEA's production is based in Europe, with approximately 30% from Asia, primarily China.
The USA prepares for a trade war
President-elect Donald Trump recently announced that the United States would impose high tariffs on goods imported from China, Mexico, and Canada. The tax rate could go as high as 25 percent.
Trump explains that the tax will be in effect until these countries stop illegal drug trafficking and the influx of immigrants into the United States.
Economists from Credit Agricole believe that the increases will not significantly affect the European economy. "Intermediate goods exported from the European Union are not a crucial component for most production processes carried out in the U.S. The United States is also not a significant market for final products manufactured in the EU," experts point out.
