April 20, 2024

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[THE INVESTOR] Amid increasing concerns over the Donald Trump administration’s threat to impose higher taxes on imports, South Korean companies including Samsung Electronics, LG Electronics and Hyundai Motor Group, are mulling to increase their spending for research and development and manufacturing facilities in the US.

Although Samsung has not officially announced the specifics of its plans yet, the company said it is evaluating new investment needs in the US.

Samsung is also said to be considering building manufacturing facilities for smartphones, in addition to home appliances, in the US, according to recent news reports,

Samsung declined to comment on the news.

In response, President Trump thanked Samsung for wanting to build manufacturing facilities for home appliances.

“Thank you, @samsung! We would love to have you!,” he said on Twitter.

LG has been more straightforward in regard to its investment plans in the US this year.

LG CEO Jo Seong-jin said at a press conference in January, “The company will make a decision on building facilities for home appliances in the US in the first half this year.”

He said the company is mulling over many options, such as construction of assembly lines that put parts together to build complete electronic devices.

Most of LG’s products exported to the US are currently made outside the US -- in South Korea and Mexico.

LG is said to be considering Tennessee as the location for a new home appliances and television plant.

Announcing its plans to double the production volume of its SUVs from 36,000 to 65,000 units in the US in a recent conference call, Hyundai Motor Group said it would make a US$3.1-billion investment in the nation for research and development of autonomous vehicles and electric cars.

Market analysts forecast the anticipated changes in the tax policy of the US government could undermine business operations of the Korean firms in the US.

“The higher tariffs will surely affect imported IT devices, such as smartphones, boding ill for Samsung and LG,” said Park Hyung-woo, an analyst from SK Securities, in his investment report.

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