IKEA Expands U.S. Manufacturing Amid Rising Tariffs and Supply Chain Strategy Shift

IKEA is accelerating plans to source more products from factories in the United States, a move driven by its long-term supply chain strategy and boosted by the impact of U.S. tariffs under the Trump administration. Susanne Waidzunas, Global Supply Manager at Inter IKEA, told Reuters that closer production will help the Swedish furniture giant reduce lead times, improve responsiveness and strengthen resilience across North and South American markets. The U.S. is IKEA’s second-largest market, and expanding local sourcing aligns with its broader goal of producing goods nearer to consumers.

For years, IKEA relied heavily on imported furniture, especially after closing its Danville, Virginia factory in 2019 and shifting production back to Europe. Currently, only 15% of IKEA products sold in the U.S. are made domestically, compared with 70% in Europe and 80% in Asia. Its top sourcing countries include China, Germany, Italy, Lithuania and Poland. However, rising shipping costs, global supply chain disruptions and tariff-related price pressures have made local production increasingly attractive. IKEA, known for low prices, had to raise U.S. prices on select products to offset tariff impacts, contributing to two consecutive years of declining sales despite price cuts aimed at budget-conscious consumers.

One major development in this shift is SBA Home, a Lithuanian IKEA supplier, ramping up operations at its new $70 million automated factory in Mocksville, North Carolina. Supported by Inter IKEA, the facility is expected to produce around 2 million furniture pieces annually, including popular items like KALLAX shelves. IKEA also plans to deepen relationships with existing U.S. suppliers such as Ohio-based Sauder Woodworking and seeks new partners for bulky categories like mattresses, aiming eventually to source most U.S.-sold mattresses domestically.

While U.S. manufacturing costs remain higher, Waidzunas emphasized that the benefits—reduced shipping volatility, faster delivery and improved supply flexibility—make the transition worthwhile as IKEA positions itself for long-term growth in the Americas.