South Korean firms brace for impact from Trump tariffs on Canada, Mexico
Seoul (The Uttam Hindu): South Korean companies are working to devise measures to minimise the impact from the United States' decision to impose high tariffs on goods imported from Canada and Mexico, officials said on Sunday . On Saturday (US time), US President Donald Trump announced he will impose 25 percent tariffs on imports from Canada and Mexico, and 10 percent on goods from China. Trump has also vowed to impose additional tariffs on energy, semiconductors and other imports in the near future, reports Yonhap news agency.
Samsung Electronics, LG Electronics and other major Korea companies with a production base in those countries have been bracing for such tariffs, which have been anticipated since Trump won the presidential election last year. LG Electronics is considering manufacturing its refrigerators and TVs at its washing machine and dryer manufacturing plant in Tennessee in the central region in the U.S. as part of efforts to evade tariffs, according to company officials.
The home appliances maker currently operates TV, refrigerator and vehicle components manufacturing plants in Mexico. Last month, LG Electronics' chief financial officer (CFO) Kim Chang-tae said during an earnings call that the company will "actively" consider changing the location of its production facilities and adjusting production capacities if the shift in U.S. trade policies pushes the company to make changes to its supply chain. Samsung Electronics CFO Park Soon-cheol has also said the company has been assessing "potential opportunities and risks from the altering geopolitical landscape, including the U.S. presidential election." Samsung Electronics also operates manufacturing plants of TVs, refrigerators and washing machines in Mexico.
The battery and automobile industries are also closely monitoring the shifting trade dynamics in the North American region, according to officials. Leading battery maker LG Energy Solution Ltd. operates a joint venture with Stellantis N.V. in Canada for the production of battery modules. Its smaller rival POSCO Future M Co. is constructing a joint venture in Canada with U.S. auto giant General Motors Co. to manufacture cathode materials, one of the most critical components in electric vehicle (EV) batteries.
Korean automotive giant Hyundai Motor Group was reportedly reviewing plans to export their cars manufactured in Mexico to Canada, South America or Europe, as well as relocating its manufacturing plant in Mexico to the U.S. Kia Corp.'s strategic investment official said during last month's conference call the company was considering adjusting its supply chain from its manufacturing facility in Mexico to respond to U.S. tariffs.
