As the economical tension between USA and China escalade, as Donald Trump wants to rebalance the trade deficite between the two countries, the companies that sell in the US, but produce in China might need the rethink their businesses.
Samsung and LG are the biggest LCD TV makers in the world, they produce them in China and they sell massively in the US. And the new fiscal terms set by the Trump administration doesn’t please the Korean tech giants. Trump also wants to make company to start manufacturing in the US, so the increase in taxation is supposed to discourage Chinese imports
On March 3, the US government decided to slap a 25 percent tariff on 1,300 Chinese exports, including robots, telecommunications equipment, chemicals and electric vehicles. Washington will likely finalize the list of Chinese exports that will be subject to the heavy tax rate next month after a series of hearings and reviewing sessions.
In this context Samsung and LG may be forced to shut down their LCD TV plants in China. “This is pretty much inevitable, since there’s no way we can break even with a 25 percent tariff rate,” a Samsung official complained.
An LG official said that the company is considering a range of options to respond to the trade conflict between China and the US. Some say the Korean firms are planning to shift production of the related TV models to different nations.