Then-Samsung Electronics Vice Chairman Lee Jae-yong, front row center, inspects the company's refrigerator factory in Queretaro, Mexico, in this September 2022 photo. Courtesy of Samsung Electronics

Samsung, LG, Kia, POSCO and multiple other Korean companies have been forced to reassess costs for running factories in Mexico and Canada, after U.S. President Donald Trump reiterated his pledge of 25 percent tariffs on the two North American countries.

Trump said on his inauguration that his government has not prepared for the universal tariff plan, which aims to impose 10 to 20 percent tariffs on all imports. However, he threatened to start levying hefty tariffs next month on goods from neighboring countries, despite their trilateral free trade pact with the United States.

Both Samsung and LG are reportedly considering reducing the production of home appliances at their Mexican factories, while increasing the output from their U.S. plants.

According to industry officials, Samsung is thinking of producing its laundry dryers in the U.S. state of South Carolina, instead of the Mexican state of Queretaro. Samsung Electro-Mechanics has already put off its plan to build an automotive camera module factory in Mexico.

LG Electronics is said to be considering relocating its refrigerator production line from the Mexican city of Nuevo Leon to the U.S. state of Tennessee, which accommodates the company's factories producing laundry machines and dryers.

“If the tariff hike is too rapid, we can consider relocation of production bases and adjustment to capacity,” LG Electronics Chief Financial Officer Kim Chang-tae said Thursday during a conference call on the company's fourth-quarter earnings.

However, some companies are likely to stay in Mexico for the lower labor costs.

“Even if we pay tariffs, Mexico is less expensive than the U.S. (in terms of producing goods),” LG Innotek CEO Moon Hyuk-soo told reporters at the CES 2025 trade show in Las Vegas, Jan. 8.

Carmakers appear to face bigger difficulties relocating their factories, considering the large size of their investments compared to home appliances manufacturers.

Batteries and other component producers therefore cannot leave Mexico and Canada for a while.

“Our factory should stay in Mexico, unless Kia relocates its factory there,” said an official from POSCO International, the supplier of traction motor cores for the carmaker's electric vehicles (EVs).

Kia said Friday that it is considering shipping cars made in its Mexican factory to Canada or other destinations, if the tariff threat becomes a reality.

Industry officials also expect the carmaker to increase the output from its factory in the U.S. state of Georgia.

Canada's Minister of Innovation, Science and Industry Francois-Philippe Champagne, fifth from right, poses with executives of LG Energy Solution (LGES) and Stellantis at the site for the two companies' joint battery plant in the province of Ontario in this March 2022 photo. Courtesy of LGES

Stellantis, a U.S. carmaker that formed partnerships with LG Energy Solution, Samsung SDI and POSCO Future M, recently scrapped its plan to relocate a car manufacturing plant to mineral-rich Canada, showing its commitment to Illinois and Detroit.

However, most of the Korean battery firms have been reducing their investments in Canada since before Trump's inauguration, due to the decelerating global demand for EVs.

Amid the looming threat of Trump's tariffs, the government convened a meeting Thursday with Korean companies doing business in Mexico to discuss countermeasures against the new U.S. administration's trade policies targeting its neighbors.

Last month, Trade Minister Cheong In-kyo held a meeting with companies having Canadian operations, in order to counteract the Trump tariff plan.