Ikea boss warns tariffs will lead to higher prices
The boss of Ikea has told the BBC he fears that global trade tensions will lead to higher prices for customers. Jesper Brodin, chief executive of Ingka Group, which is the furniture giant’s holding company, said imposing restrictions such as tariffs “normally doesn’t benefit the ordinary people”. Many countries have imposed new tariffs and other restrictions on imports in recent years. The trend was accentuated by the US under former President Donald Trump. And the World Trade Organization says even before the pandemic, trade restrictions were on the rise. “Normally it leads to cost increases on the product in the end of the day. And there are some concerns about that going on, not only in India but globally,” Mr Brodin said in a BBC interview.
Ikea has invested billions of dollars in India in ambitious expansion plans, but it imports the majority of the products it sells in the country, from furniture to kitchenware. That means it has fallen foul of higher import taxes imposed last year by Narendra Modi’s government as part of his self-reliant India drive, putting it at a disadvantage when competing with domestic rivals. As in other countries, pricing is crucial and Mr Brodin suggests buying stock locally could help. “We are on the move to drive optimal sourcing and find ways with governments and within the company to try to mitigate that.”(BBC)…[+]