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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] LG Electronics is considering relocating its production facilities to the United States if the tariff risks from the Trump administration materialize.
Kim Chang-tae, Chief Financial Officer (CFO) of LG Electronics, said during a conference call after the company's fourth-quarter earnings announcement on Thursday, "If the tariff hikes from the Trump administration reach a level where significant changes in the supply chain are needed, we may consider actively changing production locations, including relocating production facilities and adjusting production capacity at existing sites."
He added, "For products subject to high tariffs, we will respond by producing them in multiple locations and cooperating with distributors to minimize risks. We are currently preparing response plans for potential negative impacts under different scenarios."
The Trump administration is expected to impose high tariffs on major trade deficit countries like China, Mexico, and Vietnam, which are also key production hubs for LG Electronics. LG Electronics forecasts that if import quantity restrictions are also implemented in these regions, the impact of tariffs may increase.
The company has secured land behind its Clarksville, Tennessee plant, where it can build up to four additional plants, allowing it to establish production facilities at any time.
In its earnings report, LG Electronics announced that its revenue last year reached 87.73 trillion KRW, a 6.6% increase from the previous year. However, operating profit decreased by 6.4% to 3.42 trillion KRW, mainly due to rising logistics costs.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
