Recent U.S. tariffs are expected to have less impact on Samsung Electronics’ TV business, partly due to its strong production facilities in Mexico. Most of the company’s TVs sold in North America are manufactured in Mexico, thus shielding the firm from the worst effects of current U.S. trade policy, according to Samsung’s visual display business president, Yong Seok-woo.
This production approach gives Samsung a serious competitive advantage, particularly as the United States tightens tariff action that can hurt businesses that have a high dependency on products sent from Asia. Although Mexican manufacturers have so far avoided the hefty tariffs imposed by the U.S., China already has much more significant levies. Already hammered by an initial 20% tariff early this year, China will now have to fight a further 34% rate, taking total new tariffs to 54%.
The disparity between tariff burdens would potentially enable Samsung to continue holding pricing leads against competitors that rely on Chinese factory lines.
Samsung is also cautious about how changing U.S. trade policies may impact its worldwide presence. Samsung has about 10 production bases around the world for its television production, and Yong Seok-woo presumes that Samsung will keep tweaking these allocations when necessary. In the event the tariff environment changes, the company might increase or decrease activity in some locations to avoid cost rises and maintain product competitiveness in the critical U.S. market.
Executives are also preparing for blowback in other business pillars like memory chips and smartphones, both of which could experience muted demand if tariffs result in increased prices or otherwise discourage consumers. To be sure, Samsung’s diversified production strategy and wide portfolio of products provide some cushion against supply chain breaks, providing the company with leeway in how to react to quick policy shifts.
Chinese electronics producers TCL and Hisense have been consistently gaining traction in the world’s TV market, and if steep tariffs effectively drive their prices up, a wider price difference might favor Samsung. But if those rivals do something to skirt around tariffs, like opening up their own Mexico-based manufacturing lines, it may temper the level of Samsung’s advantage.
On Monday, Samsung Electronics’ shares fell 4.3% after a broader global market drop triggered by rising tariff concerns. While the firm’s television unit remains somewhat insulated due to its Mexico production, widespread uncertainty across the global trade landscape continues to unsettle investors, leaving them questioning how profoundly any future tariff actions might impact the tech industry.
