The company’s plant in Danville, VA, which opened in 2008, and employed 300 people, will be shuttered.
Operations will move to Europe, where the company says it can cut costs.
In a statement, site manager Bert Eades said, “We made every effort to improve and maintain the competitiveness of this plant, but unfortunately the right cost conditions are not in place to continue production in Danville.”
IKEA says this comes as a result of raw material prices being higher in the United States than Europe. IKEA operates plants in European countries, which include Poland, Russia and Sweden.
According to Virginia Democratic Senator Tim Kaine, workers in the Danville plant were worried about how tariffs would affect costs.
An article from CNN says since Kaine visited the plant, the Trump administration imposed tariffs on imports of particle board, a common IKEA material, from China.
IKEA said the decision to close the plant was not related to tariffs and that the particle board used at the Danville plant was purchased from US suppliers.
IKEA owns manufacturing facilities in nine countries, employing roughly 20,000 people in total.
While this will inevitably impact the 300 employees of the factory based in America, this new move will provide 11,500 jobs for people in Europe.