"Korean Industries Accelerate Response to U.S. Tariffs... Doubling Down on Localization Despite Export Decline"
Korea's Leading Exporters Relocate Production to Counter U.S. Tariffs Major Korean exporters are rapidly shifting their production bases to counter impending tariffs from the United States. Companies with significant export volumes to the U.S.—especially in the automobile and electronics sectors—are responding strategically by expanding local production and increasing output in countries like Mexico and Canada, where tariff exemptions under trade agreements are more likely. According to industry sources on the 22nd, Hyundai Motor is swiftly ramping up production at its Alabama plant (HMMA) and the Hyundai Motor Group Metaplant America (HMGMA) in Georgia. Combined production from these two plants in the first quarter reached 105,316 units. HMMA operated at 102.8% of capacity, exceeding its 88,100-unit threshold, while HMGMA operated at 54.7% of its 25,900-unit capacity. Kia is also increasing output at its plant in Mexico, which has an annual production capacity of nearly 400,000 units. Having produced 270,000 units last year, Kia could potentially boost production by 130,000 units this year. Kia is focusing on the Mexico plant because, under the United States-Mexico-Canada Agreement (USMCA), it can be exempt from tariffs on parts if the rules of origin are met. Additionally, Kia is expected to expand production of models such as the Sportage, Sorento, Telluride, EV6, and EV9 at its West Point plant in Georgia. The electronics industry is also stepping up local production to mitigate the effects of potential U.S. tariffs. During its Q1 earnings announcement, Samsung Electronics stated, “We are reviewing flexible and strategic utilization of our global manufacturing bases and sales hubs based on local conditions.” This suggests the company may shift production of some TVs and home appliances to minimize tariffs imposed since the Trump administration. However, Samsung faces the challenge of adjusting its production strategy quickly, especially since it currently relies heavily on Vietnam for smartphone production (60%), along with TVs and other appliances. LG Expands U.S. Washer and Dryer Production; Hyundai Motor–POSCO Forge U.S. Steel Alliance LG Electronics plans to expand its production of washers and dryers by shifting manufacturing to its plant in Tennessee. In its Q1 earnings call, LG stated, “For products from production bases expected to face high tariffs, we will secure optimal production locations based on our local network.” The company added, “We anticipate increasing U.S.-bound production to the high-10% range of total exports,” and noted that “for future expansion of U.S. production facilities, we are reviewing and comparing various scenarios to respond flexibly to policy changes in the U.S.” Meanwhile, rivals Hyundai Motor Group and POSCO Group are joining forces to strengthen their position in the U.S. steel market. On April 21, the two companies signed a Memorandum of Understanding (MOU) for comprehensive cooperation in steel and secondary battery materials. Through this partnership, POSCO Group is considering investing equity in Hyundai Motor Group’s electric arc furnace (EAF) steel mill project in Louisiana, as well as potentially handling direct sales of some of the plant's output. Hyundai Motor Group’s Louisiana steel mill, with a total investment of USD 5.8 billion, will be a vertically integrated facility specializing in automotive steel sheets—from raw materials to finished products. The mill is designed to produce high-quality products with lower carbon emissions compared to blast furnaces, and it is expected to have an annual output capacity of 2.7 million tons of hot-rolled and cold-rolled steel sheets. Hanwha Group is actively targeting the U.S. market, with Hanwha Qcells responding to local demand through its “Solar Hub,” the largest integrated solar production complex in North America. Hanwha Ocean is also focusing on U.S. expansion, having acquired the Philly Shipyard in Philadelphia last year for approximately USD 100 million. ChatGPT를 사용하여 번역한 기사입니다.
