Samsung and LG consider shifting production from Mexico to U.S.
Samsung and LG evaluate production shift to U.S. due to potential tariffs
Samsung Electronics and LG Electronics are reviewing the possibility of relocating some of their home appliance production from Mexico to the U.S., following concerns over the potential imposition of 25% tariffs on imports from Canada and Mexico, as suggested by U.S. President Donald Trump.
Key Takeaways
- Samsung and LG are considering moving their home appliance production from Mexico to the U.S. in response to the potential new tariffs proposed by the U.S. government.
- Samsung plans to shift the production of dryers from its Mexican plant to South Carolina, while LG is looking to move refrigerator production to its Tennessee factory.
- Both Samsung and LG have stated that they will monitor the evolving tariff situation and adjust their production strategies accordingly, maintaining flexibility in their global operations.
Samsung and LG Are Reviewing Manufacturing Relocation
In light of the potential tariffs announced by President Donald Trump, both Samsung Electronics and LG Electronics are reevaluating their production strategies. These tariffs, which could impose 25% duties on imports from Canada and Mexico, have prompted the companies to explore the possibility of moving certain manufacturing operations from Mexico to the United States, reports Reuters.
Samsung Electronics Co Ltd share price dynamics (Jul 2023 - Jan 2025) Source: Investing.com
This shift would help the companies avoid the additional costs that the tariffs might impose on products sold in the U.S. market. This decision reflects broader concerns within the global supply chain as businesses attempt to navigate a rapidly changing trade environment.
Specific Products Affected: Samsung and LG Target Different Items
Samsung is specifically considering shifting the production of dryers from its existing plant in Mexico to its plant in South Carolina. This move aims to reduce any potential tariff-related impact while maintaining supply chain efficiency for the U.S. market.
Similarly, LG is exploring relocating its refrigerator production from its Mexican facilities to a factory in Tennessee, which already produces washing machines and dryers. Both companies are strategically targeting products that are major components of their appliance lines, with the goal of mitigating the financial impact of the tariffs and optimizing their U.S.-based operations.
Companies Stress Flexibility in Response to Market Conditions
While both Samsung and LG have acknowledged the need to respond to the potential tariffs, they are also emphasizing their operational flexibility. Samsung has noted that it will continue to monitor the situation closely and respond flexibly, given that it operates production facilities in multiple regions worldwide.
Similarly, LG has indicated that it plans to adapt its production system and locations to changing market conditions. This flexibility is key to both companies’ strategies, as they seek to navigate the complexities of the trade environment and ensure that their production remains responsive to global demand.
Samsung and LG are proactively evaluating their options in response to potential tariffs that could significantly impact their bottom lines. Both companies are focusing on maintaining flexible production strategies to ensure they continue to meet the needs of the U.S. market while adapting to the shifting trade landscape.
Reminder, LG Energy Solution Ltd., a major player in the global electric vehicle (EV) battery market, reported a surprising operating loss for the fourth quarter of 2024.
