Synopsis
South Korean companies are devising strategies to minimize the effects of U.S. tariffs imposed on imports from Canada and Mexico. Major firms, including LG and Samsung, are considering relocating manufacturing and adjusting supply chains to mitigate tariff impacts. The evolving geopolitical landscape is prompting significant changes in production strategies.Key Takeaways
- South Korean firms are preparing for U.S. tariffs.
- Trump announced tariffs of 25% on Canada and Mexico.
- LG Electronics is considering relocating production to Tennessee.
- Samsung is assessing geopolitical risks.
- Automotive and battery industries are monitoring trade dynamics.
Seoul, Feb 2 (NationPress) South Korean companies are actively formulating strategies to mitigate the repercussions from the United States' announcement of significant tariffs on products imported from Canada and Mexico, officials noted on Sunday.
On Saturday (US time), President Donald Trump revealed his plans to impose a 25 percent tariff on imports from Canada and Mexico, alongside a 10 percent tariff on goods from China.
Trump has also committed to introducing further tariffs on energy, semiconductors, and other imports in the forthcoming future, as reported by the Yonhap news agency.
Samsung Electronics, LG Electronics, and other prominent South Korean firms with production facilities in these nations have been preparing for such tariffs, which were expected since Trump secured the presidency last year.
LG Electronics is contemplating relocating its manufacturing of refrigerators and TVs to its washing machine and dryer factory in Tennessee, USA, as a strategy to avoid tariffs, according to company representatives.
The home appliance manufacturer currently has manufacturing facilities for TVs, refrigerators, and vehicle components in Mexico.
Last month, LG Electronics' Chief Financial Officer Kim Chang-tae mentioned during an earnings call that the company will actively consider relocating its production sites and adjusting its capacities if shifts in U.S. trade policies compel the company to alter its supply chain.
Samsung Electronics CFO Park Soon-cheol also indicated that the company is evaluating potential opportunities and risks arising from the evolving geopolitical landscape, including the U.S. presidential election.
Samsung Electronics also runs manufacturing plants for TVs, refrigerators, and washing machines in Mexico.
The battery and automotive sectors are closely observing the changing trade dynamics within the North American region, officials reported.
Leading battery producer LG Energy Solution Ltd. has a joint venture with Stellantis N.V. in Canada dedicated to producing battery modules.
Its smaller competitor POSCO Future M Co. is in the process of constructing a joint venture in Canada with General Motors Co. to produce cathode materials, an essential component in electric vehicle (EV) batteries.
The South Korean automotive giant Hyundai Motor Group was reportedly considering plans to export cars made in Mexico to Canada, South America, or Europe, as well as relocating its manufacturing facility from Mexico to the U.S.
Kia Corp.'s strategic investment official stated during a conference call last month that the company is contemplating adjusting its supply chain from its Mexico manufacturing facility in response to U.S. tariffs.
