IKEA Plans to Boost US Manufacturing to Offset Tariffs and Strengthen Supply Chain

IKEA

USA: IKEA is planning to increase the share of products manufactured in the United States as higher tariffs continue to drive up the cost of importing furniture, according to a Reuters report. The move represents a shift for the Swedish furniture retailer, as only around 15% of the products currently sold in its US stores are domestically made, compared with significantly higher levels of local production in regions such as Europe and Asia. IKEA previously operated a manufacturing facility in Danville, Virginia, but shut it down in 2019 and relocated production back to Europe.

The renewed emphasis on US manufacturing is being driven by rising tariffs that have made cross-border shipping of bulky items, such as bookcases, mattresses, and sofas, more expensive. While tariff avoidance is one factor, IKEA has indicated that the broader objective is to bring production closer to customers, enabling faster response to demand shifts and reducing exposure to overseas supply chain disruptions. Increasing domestic production is also expected to lower long-haul transportation costs and shorten delivery times, challenges that have become more pronounced since the pandemic. The company believes this strategy will help reduce product shortages and improve overall customer service.

This manufacturing push aligns with IKEA’s ongoing investments in its US logistics and delivery infrastructure. Earlier this year, the company acquired last-mile delivery technology provider Locus to strengthen control over route planning, delivery visibility, and final-mile operations, further supporting its efforts to enhance efficiency and reliability in the US market.

Source: IKEA