November 21, 2024

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[THE INVESTOR] In a spillover effect of the brewing trade war between the world’s two largest economies, Korean tech giants Samsung and LG may be forced to shut down their LCD TV plants in China, according to industry sources on April 16.

The plants produce 40-50 inch TVs that are exported to the US. The two firms are said to be close to reaching a decision on this move as the tariffs expected to be slapped on Chinese products would be too steep for them to handle. 

“This is pretty much inevitable, since there’s no way we can break even with a 25 percent tariff rate,” a Samsung official complained.

An LG official said that the company is considering a range of options to respond to the trade conflict between China and the US. Some say the Korean firms are planning to shift production of the related TV models to different nations.

The combined export volume of both companies from China to the US market accounts for less than 10 percent of their entire TV shipments. Most of their TVs are produced in other markets including Mexico.

On March 3, the US government decided to slap a 25 percent tariff on 1,300 Chinese exports, including robots, telecommunications equipment, chemicals and electric vehicles. Washington will likely finalize the list of Chinese exports that will be subject to the heavy tax rate next month after a series of hearings and reviewing sessions.

By Kim Young-won (wone0102@heraldcorp.com)