LG mulls US plant expansion to deal with Trump 2.0 tariffs

CLARKSVILLE, TN -- South Korea’s appliance and electronics giants are actively looking into options to ramp up the production capacity of their plants in the US as they brace for the Trump 2.0 era heralding universal tariffs on imports from foreign countries.

According to sources on Monday, LG Electronics Inc. is actively considering adding new manufacturing lines near its only US appliance manufacturing plant in Tennessee to churn out refrigerators there.

The Korean tech giant currently produces front-load and top-load washing machines and dryers from the plant’s four lines in Clarksville, TN, which opened in 2018.

The new facility to produce refrigerators is expected to be built on an idle plot of land next to the plant.

The output expansion is expected to lower not only LG’s logistics costs but also tariffs on its goods shipped to the US.

As the incoming Donald Trump administration has threatened to impose universal duties on most imports to revive the world’s No. 1 economy’s manufacturing industry and create more local jobs, LG Electronics’ line ramp-up of its US appliance plant is also envisioned to enhance its ties with the new US government.

LG Electronics’ plant in Clarksville is a largely autonomous facility powered by advanced digital technologies from AI and big data to the Internet of Things and robots, helping the company save operation costs on higher efficiency.

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LG Electronics’ cross-town rival Samsung Electronics Co. is also said to be considering relocating two refrigerator lines from home to the US instead of Mexico, amid looming concerns of possible 25% tariffs by the incoming Trump administration on imports from Mexico.

Samsung Electronics operates two appliance plants in America – one in Newberry, South Carolina and the other in Querétaro, Mexico.

It recently decided to move two refrigerator production lines from its local plant in Gwangju to North America but has not yet decided to which country the lines will be moved.

The Korean electronics giants are expected to have the upper hand in a race to increase market share in the US appliance market valued at about $40 billion with their expanded facility investment.

As of the third quarter of last year, LG Electronics topped the US washing machine and dryer market with about 20% share, said an official from LG’s Tennessee plant, adding that the more local production, the shorter the delivery period in the US, which would bode well for its US market penetration.

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“The US is set to emerge as a new manufacturing hub for global companies in the Trump 2.0 era,” said an official from the local electronics industry. “Many companies are actively considering ramping up their production capacity in the US.”

Korean chip giants such as SK Hynix Inc. also plan to accelerate their facility investment in the US as the new Trump government takes office next Monday. 

Samsung Electronics and SK Hynix have committed to investments of $44 billion and $3.87 billion, respectively, to build chip production sites in the US.

Samsung is building an advanced semiconductor factory and a packaging facility near its foundry plant under construction in Texas.

SK Hynix plans to begin mass production from a new chip packaging plant in West Lafayette, Indiana, in 2028.

Write to Jin-Won Kim and Jeong-Soo Hwang at jin1@hankyung.com

Sookyung Seo edited this article.