US-Mexico tariff truce comes as relief to Samsung, LG
When the US and Mexico reached an agreement on tariffs last week, the sigh of relief in the Korean electronics industry was palpable. But industry officials said Korean electronics giants would remain on their guard amid ongoing trade conflicts, including the one between China and the US.
“The planned tariffs on all imported Mexican goods could have dealt a blow to Korean electronics giants Samsung and LG, both of which run factories in the North American nation,” said an official in the local electronics industry, who spoke on condition of anonymity.
“The agreement is sort of a relief for the Korean firms, and they will continue to be vigilant (about watching for signs of change) in the relationship between the two countries,” the official added.
Samsung manufactures most of its TVs and refrigerators for the North American market at its plants in Tijuana and Queretaro, both in Mexico.
LG also rolls out most of its TVs and a third of its fridges sold in the North American market in Mexico.
The Trump administration had warned that it would impose a 5 percent tax on all imported Mexican goods and eventually raise it to 25 percent unless Mexico took steps to reduce the number of economic migrants and Central and South American asylum seekers illegally crossing the US border.
The two sides reached an accord June 7 and Mexico complied with some of the US requests -- among other things, by deploying national security forces along the border with Guatemala.
Tech giant Samsung Electronics, which earns more than 30 percent of its revenue in North America, is moving fast to respond to potential risks stemming from global trade wars.
After meeting with the top brass of Samsung Electronics’ chip division on June 1, Samsung Vice Chairman Lee Jae-yong will reportedly meet with the top executives of other divisions, including those in charge of home appliances, displays and mobile phones, to discuss the ongoing trade conflicts involving the US, China and Mexico and how best to respond.
The US government’s recent blacklisting of Chinese tech firm Huawei is expected to present both benefits and risks for the Korean tech giant, according to market analysts.
Despite their rivalry in the smartphone sector, Huawei is one of Samsung’s largest customers for mobile memory chips and displays.
By Kim Young-won (email@example.com)