One of the executives at Samsung Electronics has made it clear that the company's TV business will see fewer U.S. tariffs than competitors like TCL and Hisense due to the fact that most of its TVs sold in North American nations are produced in Mexico. According to Yong Seok-woo, president of the visual display business at Samsung, the company has also planned to allocate production accordingly across about 10 production bases around the world, depending on how the U.S. tariff policy changes.
Why is Samsung using Mexico?
Mexico largely escaped Trump's new 10% global baseline tariff and steeper "reciprocal tariffs" for many trading partners on Wednesday. Trump’s proposed 10% global baseline tariff is a trade policy idea where, if he's re-elected, the U.S. would impose a universal 10% tariff on all imported goods, regardless of the country they come from. This is meant to encourage more domestic manufacturing and reduce reliance on foreign products.
The "steeper reciprocal tariffs" refer to the idea of imposing higher tariffs on countries that charge higher tariffs on U.S. goods, essentially matching or exceeding the rate those countries impose. Mexico largely escaped these proposed tariffs because of its close trade ties with the U.S. under agreements like USMCA, which might protect it from some of the broader tariff measures. In contrast, China will be hit with a 34% U.S. tariff on top of the 20% previously imposed earlier this year, bringing the total new levies to 54%.
Samsung is also getting ready for the impact from U.S. tariffs on its other mainstay businesses, such as memory chips and smartphones, which could face reduced demand. The company's shares on Monday slumped 4.3% amid the broader market sell-off triggered by U.S. tariff fears.
