Korean companies Samsung and LG analyze the impact of US duties on steel products. The measure can cause a change in their global production strategies.
South Korean companies Samsung Electronics and LG Electronics are trying to assess the impact of Washington’s decision to add home appliances to the list of so -called. derived products made using steel that will be subject to increased duties in the US. These can reach up to 50 %. This was stated on Friday sources from industry. TASR reports on this based on Jonhap report.
The US sales department has published a notification in the Federal Register, stating that customs tariffs will be assessed for various imports of household appliances, including refrigerators and washing machines based on the value of steel content in each of them. The measure will come into effect on 23 June.
Increase in production price
Although both Samsung and LG operate production plants in the US, this local production is limited primarily to washing machines. A significant proportion of other key products are still produced in countries like South Korea, Mexico and Vietnam, as a result of which they are in danger of increasing duties.
“We are thoroughly analyzing the influence of the latest US measures, especially within the relevant commercial divisions,” the sector said, subject to anonymity.
Relocation of production
Due to the high content of steel in household appliances, the new tariff is expected to increase production costs and press profit margins.
If duties raise prices, Korean companies may lose price competitiveness compared to US manufacturers. In the long run, the relocation of most of the production to the US may have to be considered, and experts believe.
Both Samsung and LG are reviewing their global production strategies in response to these plans. They called on the government in Seoul to try to reach relief negotiations.
New investment plans
LG Electronics is already considering the gradual transfer of washing machines and dryers to its Tennessee plant in order to increase the share of the sale of appliances in the US from local production to 10 %.
