US tariffs prompt LG Electronics to halt expansion at northern Vietnam plant
South Korea’s LG Electronics has suspended plans to expand its microwave and refrigerator production at its plant in Vietnam’s northern port city of Hai Phong due to U.S. tariffs.
The suspension was disclosed during a meeting last week between the Hai Phong Economic Zone Authority (HEZA) and companies that export to the U.S.
The pause has affected 400 workers at the LG Electronics Hai Phong plant, according to a report presented at the meeting.
LG Electronics factory in Hai Phong city, northern Vietnam. Photo courtesy of Kinh Te & Do Thi (Economics & Urban) newspaper.
The new U.S. tariff policy, including the 10% baseline duty, has inflated costs for exporters, resulting in reduced profits, competitiveness, and market share in the U.S. market, said the report.
According to the South Korean chaebol’s 2024 performance review, LG Electronics Vietnam Hai Phong recorded a revenue of KRW5,635.7 billion ($3.88 billion), up 9.79% year-on-year. Its post-tax profit grew 15.68% to KRW173.9 billion ($119.8 million).
As of April 2024, LG’s investment in Vietnam, mostly in the northern coastal city of Hai Phong, had reached $8.24 billion. Starting with $1.5 billion in 2013, the investment includes $7.24 billion conducted by LG itself, featuring LG Electronics, LG Display, LG Innotek, LG CNS, LG Chemical, and LG International, and $1 billion conducted by 50 affiliates of LG.
In November 2024, LG Display received an investment registration certificate to invest $1 billion more in Hai Phong.
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