The premium television businesses of Samsung Electronics and LG Electronics are facing a direct hit due to tariffs resulting from Trump administration policies. If the United States imposes a 25% tariff on products from Mexico, Korean television manufacturers with production bases in Mexico will inevitably suffer. There are predictions that China may provide subsidies to its domestic TV companies, placing our corporations on the front lines of the tariff war.
On the 7th, market research firm Counterpoint Research analyzed data from the U.S. International Trade Commission (ITC) and predicted that approximately 88% of finished goods imported into the United States would be affected by Trump’s tariff policies. Based on 2023 figures, televisions imported from Mexico to the U.S. had a value of $9.2 billion (approximately 13.3 trillion won), accounting for 78% of total TV imports. Imports of Chinese televisions were recorded at $1.1 billion (approximately 1.6 trillion won), which represents about 10% of the total. If tariffs are added to Mexican products, it will be unavoidable for TV manufacturers producing televisions in Mexico for export to the United States to incur damages.
Particularly, analyses suggest that the North American premium TV businesses of Samsung Electronics and LG Electronics will be directly impacted. The North American market has a relatively high demand for expensive televisions, making it a key region responsible for the revenue of Samsung Electronics and LG Electronics' TV businesses. In the first to third quarters of last year, Korean brands held a 48% market share in North America, while Chinese brands commanded 27%. An industry official noted, "While Chinese companies producing TVs in Mexico will also be adversely affected by the tariffs, domestic TV corporations, which are focusing on premium strategies, cannot afford to abandon the North American market or push it to the back burner, leading to deeper concerns."
TV manufacturers are contemplating countermeasures such as diversifying their production bases. U.S. President Donald Trump temporarily suspended the imposition of a 25% tariff on Mexican goods for one month on the 3rd (local time), but a 10% tariff is already applied to Chinese products. In response, Samsung Electronics and LG Electronics are considering expanding TV production in Europe and Southeast Asia or producing televisions directly in the U.S. Currently, Samsung Electronics is producing TVs in Mexico's Tijuana plant, as well as in Vietnam and Hungary, while LG Electronics operates TV production plants in Indonesia, Brazil, and Poland in addition to its factory in Reynosa, Mexico.
In light of these circumstances, some speculate that an increase in TV prices is inevitable. Calvin Lee, a researcher at Counterpoint Research, stated, "Even if production is ramped up in Europe and Southeast Asia in the short term, it will be difficult to avoid a global increase in TV prices due to Trump’s tariff policies." However, he added, "Since there is a high likelihood that the Trump administration's tariff policies will be used as negotiation leverage, corporations will continuously monitor policy changes and devise response strategies."
In this situation, Chinese TV companies are expected to be placed in a relatively favorable position compared to Korean corporations due to the Chinese government's subsidy policies. The Chinese government announced a plan last year to issue long-term government bonds valued at 1.3 trillion yuan (approximately 258 trillion won), with a prevailing prediction that some of these funds will be used as subsidies for consumer goods sales, including home appliances. If the Chinese government actually provides sales subsidies, Chinese TV manufacturers are likely to maintain existing prices despite the tariff bomb from the U.S. An industry official stated, "Chinese companies are likely to continue their existing low-price strategy, while Korean corporations will devise strategies to minimize the impact of tariff burdens on consumer prices by collaborating with local distributors."