SEOUL -- Samsung Electronics said Thursday it was considering building plants to make home appliances in the U.S. as part of its mid- to long-term strategy.
The South Korean tech company said it was thinking of setting up factories in the U.S. to cope with changing circumstances. One of U.S. President Donald Trump's key economic policies is protectionism and under that, he has been pressuring companies to move overseas production lines to America.
"Under our mid- and long-term base strategy, we are reviewing a project to construct plants in the U.S.," said Seo Byung-sam, head of Samsung's home appliance business unit at an event to launch the company's new washer at its Seoul office.
"It is common strategy in the manufacturing industry to move production bases flexibly to boost global competitiveness," he said.
But he declined to elaborate on how much the company would invest, saying Samsung would reveal details later. Samsung already has a $17 billion semiconductor manufacturing facility in Austin, Texas.
The company had been producing home appliances for the U.S. market in Mexico, taking advantage of the tariff-free North American Free Trade Agreement. But Trump has vowed to renegotiate the pact, raising worries that companies would be hit with import tax. The Wall Street Journal reported that the new U.S. plants could produce some of the oven ranges that Samsung now makes in Mexico.
Samsung's announcement came three days after Trump's key economic adviser criticized South Korean companies for moving their production lines to foreign countries to skirt around anti-dumping rules. But the Journal report suggests that the plans for the new U.S. plants were already in the works before Trump won the U.S. elections.
"Two of the South Korean competitors, LG and Samsung, simply move the production to another country each time Whirlpool wins anti-dumping cases against them," said Peter Navarro, head of the White House National Trade Council, at an economic policy conference.
Last week, LG Electronics said that it would invest $250 million to build a washing machine plant in Clarksville, Tennessee, creating 600 full-time jobs. In January, Hyundai Motor, South Korea's largest automaker, said it would invest $3.1 billion in the U.S. for the next five years, including building new plants.
Analysts say that with these investments, Samsung and LG are trying to placate the Trump administration to gain access to the U.S. market. "They want to erase anti-dumping issues quickly by showing they are willing to invest in the U.S.," said SK Kim, an analyst at Daiwa Capital Markets. "That is a good strategy considering the U.S. is the key market for their premium products."
Shares of Samsung Electronics closed flat at 2,010,000 won apiece on Thursday after hitting a fresh record high of 2,031,000 won on Wednesday. LG Electronics' shares dipped 0.15% to 64,800 won after hitting a one-year high of 65,800 in the day. The benchmark Kospi dropped 0.22% to 2,091.06.