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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] LG Electronics has scrapped plans to expand its TV and home appliance manufacturing plants in Southeast Asia, including Vietnam and Indonesia, shifting its strategy toward increasing production in North America, particularly Mexico and the United States.
According to industry sources on Tuesday, LG recently put on hold its production expansion projects in Vietnam, Indonesia, and Poland. The move marks a strategic pivot in response to changing global trade dynamics, including recent U.S. tariff policy changes.
Last year, LG considered reducing production in Mexico due to concerns over high tariffs potentially being imposed by then-President Donald Trump. The company had been reviewing options to divert production volume from Mexico to other countries. LG operates a flexible “swing production” system, adjusting factory output across different countries based on logistics costs and local economic conditions.
On February 1, the U.S. imposed a 25% tariff on goods from Mexico, prompting LG to prepare backup plants for increased output. However, the tariff was suspended just two days later and has remained on hold, with Mexico excluded from the current list of reciprocal tariff nations.
More recently, the U.S. announced steep reciprocal tariffs—46% on goods from Vietnam and 32% on those from Indonesia. This significantly eroded Southeast Asia’s cost advantage, leading LG to scrap its expansion plans in those regions.
Instead, LG is now considering boosting production at its Mexican facilities and expanding the capacity of its appliance plant in Tennessee. Notably, the company is investing $100 million to build a large warehouse next to its washing machine plant in Tennessee, designed to be easily converted into a full-scale appliance production facility when needed.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
