Lego Plans US Plant to Offset Oil Costs and Tariffs

The Lego Group is preparing for increased raw material and energy costs after Brent crude oil prices surged up to 65% following joint US and Israeli bombings of Iran on February 28. CEO Niels Christiansen stated that while existing contracts cushion the short-term impact, prolonged high prices could eventually increase the cost of plastics.

In addition to energy volatility, the company is managing new blanket tariffs of 10%, which may increase to 15%, imposed by President Donald Trump after a Supreme Court ruling overturned previous levies. To mitigate these costs, Lego is shifting production closer to key markets and will open its first US manufacturing facility in Virginia in 2027.

Despite these headwinds, Lego reported growth across all regions in 2025 and expects high single-digit revenue growth this year. The company is targeting this growth through the introduction of interactive SMART Bricks and new collaborations with Nike, Formula 1, Bluey, and Pokemon.