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Swedish furniture giant IKEA is raising prices across its US stores as new tariffs on imported wood and furniture take effect under President Donald Trump's latest trade policy.

The company confirmed that it can no longer absorb the added costs from the 25% tariff on upholstered furniture and other wood-based products.

The move marks a shift from IKEA's earlier price-cut strategy, which helped customers manage inflation over the past two years.

Starting October 14, the US government began enforcing a 10% tariff on imported softwood lumber and a 25% tariff on upholstered furniture, kitchen cabinets, and bathroom vanities, FoxBusiness said.

These rates are expected to rise again in January — with furniture tariffs increasing to 30% and cabinetry tariffs possibly reaching 50% unless exporting nations reach a trade deal.

IKEA's global retail manager, Tolga Öncü, said the company had no choice but to adapt. "We can't stay immune to absorb all the costs ourselves," he told The Wall Street Journal. "But the big work sits in finding ways to lower the prices."

While Öncü emphasized that affordability remains a priority, he admitted that keeping prices low is becoming "very difficult, or even impossible" in today's market.

Customers have already started noticing the changes. The popular Uppland sofa, for example, now costs $899, up from $849 in August.

A three-piece oak bedroom set rose to $1,049, nearly $100 more than two months ago.

IKEA Plans to Boost American Manufacturing

A spokesperson for IKEA said in a statement that "affordability remains a top priority," adding, "While we've made some necessary price adjustments due to rising costs, we are committed to keeping prices low and providing quality goods to our customers."

According to the NY Post, only about 15% of IKEA's US products are made domestically, making the company highly exposed to the new tariffs.

Most of its furniture is imported from suppliers across Europe and Asia. To offset the impact, IKEA is exploring more US manufacturing options.

The company already produces all its kitchen cabinets for the American market domestically and is now considering sourcing mattresses and other home goods from US suppliers.

"These tariffs are confirming we are on the right track when it comes to producing more in the US," Öncü said.

IKEA's global sales fell 1% to €44.6 billion ($52 billion) in the last fiscal year, and analysts say higher prices could further test consumer demand.