LG Electronics to Expand Product Line at Tennessee Plant in the U.S.... "Preparing for Presidential Election Outcome"

LG Electronics is considering producing home appliances other than washing machines and dryers in the United States in preparation for the possibility of a deteriorating trade environment depending on the outcome of the U.S. presidential election this November. The company plans to overcome protectionism through a localization strategy.

According to the industry on the 4th, Son Chang-woo, head of LG Electronics' Tennessee plant, said at a press briefing held at the Clarksville plant in Tennessee on the 31st of last month (local time), "We are preparing slightly different response strategies for when Trump is elected and when Biden becomes president." He mentioned Trump's pledge of a 10% universal tariff and explained, "Looking at the trade policies advocated by Biden and Trump currently, Trump's policies are not better from our standpoint."

Exterior view of LG Electronics' Tennessee factory in the United States. [Photo by LG Electronics]

However, he added that the U.S.-China trade environment is still unfavorable, with the Biden administration updating Section 301 tariffs against China, saying, "It doesn't seem that Biden is necessarily better or that Trump is necessarily more difficult."

The strategy LG Electronics is preparing is to manufacture other products such as refrigerators and TVs at the Tennessee plant, which currently produces washing machines and dryers. Son explained that there is enough space on the current site to build three more factory buildings. The washing machine plant occupies only 94,000 square meters of floor space on a 1.25 million square meter site.

Son said, "If trade issues arise and we need to secure another production site, we could produce not only refrigerators but also other products like TVs," adding, "We are fully capable of responding in such a situation and are preparing for such a response."

LG Electronics is also preparing for the possibility that the U.S. may impose tariffs on parts imported from other countries necessary for production at the Tennessee plant. Son said, "There are risks with parts whether Trump or Biden is in office," and added, "We are continuously diversifying our parts suppliers, considering tariffs and logistics costs, including sourcing parts from partners near LG Electronics' plant in Mexico."