Ingka braces for impact: Trump's tariffs challenge trade dynamics
Jasper Brodin, CEO of Ingka Group, acknowledged that the tariffs that Donald Trump's administration plans to introduce soon will negatively affect international trade. "It’s beyond our control. We will need to understand and adapt," Brodin announced.
In a conversation with CNN, Brodin stated that tariffs make it difficult to maintain low prices and product availability. "We have never experienced a period of benefit when we had high tariffs," he commented. Ingka Group, which he heads, is the largest IKEA franchisee.
Brodin did not mention whether the company will move production to other countries due to the proposed tariffs by the USA. Currently, about 70% of IKEA's production is sourced from Europe, with approximately 30% from Asia, primarily China.
The USA is preparing for a trade war
President-elect Donald Trump recently announced that the USA will impose high tariffs on goods imported from China, Mexico, and Canada. The tax rate could reach as high as 25%.
Trump claims that the tax will remain until the three mentioned countries put an end to illegal drug trade and the influx of immigrants to the USA.
Economists at Credit Agricole believe that the increases will not significantly affect the European economy. "Intermediate goods exported from the European Union are not a major component in most production processes in the USA. Additionally, the United States is not a significant recipient of final products manufactured in the EU," the experts emphasize.
