Ryu Jae-cheol, President of LG Electronics, "Responding to Trump Tariffs with Production Flexibility... Preparing for All Scenarios"

Ryu Jae-cheol Holds 'DCW 2025' Press Briefing
Responding to Trump Tariffs with Production Flexibility
"Tennessee Plant During Trump's First Term Was a Masterstroke"
U.S. B2B Home Appliance Sales Grew 64% Last Year
This Year's Goal: "Exceed Last Year's Results"
"Will Solidify No. 1 Position in U.S. with B2B, High-Efficiency, and AI Smart Homes"

"We plan to respond to the U.S. tariff policy with a production site flexibilization strategy. Although uncertainties are significant, we will respond more agilely than our competitors and expand the business-to-business (B2B) market to maintain LG Electronics' solid leadership in the world's largest U.S. home appliance market."

Ryu Jae-cheol, President of LG Electronics HS Business Division, held a press briefing on the 25th (local time) in Las Vegas, USA, where 'DCW 2025' is taking place, and announced that the company will continue to maintain solid leadership in the world's largest premium home appliance market, the United States, focusing on business-to-business (B2B), energy efficiency, and AI homes.

Ryu Jae-cheol, President of LG Electronics' HS Business Division, held a press briefing with U.S. correspondents on the 25th (local time) in Las Vegas, where 'DCW 2025' is taking place, stating, "Regardless of how the U.S. tariff policy is determined, we are reviewing and preparing response plans for every scenario at the company-wide level on a daily basis."

In response to a question about dealing with U.S. President Donald Trump's tariff policy, he said, "If production in Mexico becomes an issue, we can increase production in the U.S., and expanding production in Korea, Vietnam, and Thailand can also be alternatives," adding, "We are preparing a flexible production system that can manufacture all products at any production site to prepare for supply chain instability and regulatory uncertainties."

Earlier, President Trump announced a 25% tariff on all imports coming from Mexico. LG Electronics produces major home appliances such as TVs and refrigerators in Mexico, so an impact is expected.

Regarding concerns about cost increases due to the U.S. raising tariffs by 25% on all steel and aluminum imports scheduled for next month, President Ryu explained, "It cannot be said that only we are disadvantaged by steel tariffs," noting that all competitors face the same environment, so there is no need for excessive concern.

He viewed the washing machine 'tariff bomb' during Trump's first administration as an opportunity to secure manufacturing competitiveness in the U.S. Previously, in January 2018, President Trump imposed safeguards (emergency import restrictions) with tariffs up to 50% on Korean-made washing machines, and LG Electronics began full-scale operation of its washing machine production line in Tennessee, U.S., from December of the same year. At that time, to offset cost increases, they maximized production efficiency through module design and process simplification.

President Ryu emphasized, "Looking back, the Tennessee plant was a 'masterstroke.' Although there was a slight learning cost, operating a factory in the U.S. and generating profits gave us confidence and secured competitiveness in home appliance manufacturing."

He plans to minimize the 'Trump risk' centered on the production flexibilization strategy while expanding LG Electronics' position in the U.S. home appliance market through B2B market penetration. The U.S. home appliance market was the world's largest at $40 billion (approximately 57 trillion KRW) last year, with the B2B market accounting for 20%. President Ryu set a goal to achieve over 60% sales growth in the B2B home appliance sector this year.

He stated, "LG Electronics' U.S. B2B home appliance sales grew 64% year-on-year in 2024," emphasizing, "Based on manufacturing competitiveness, infrastructure capabilities such as appliance supply and installation, and a solid sales organization, we will achieve results exceeding last year's this year." He explained that the B2B market targeting the housing construction and building industry is expanding faster than the business-to-consumer (B2C) market, presenting significant growth opportunities in the future.

Regarding the forecast of a sluggish new housing market in the U.S., President Ryu said, "In the B2C market, LG Electronics is a leader and needs to grow the overall market pie, but in the B2B market, our goal is to enter the 'top 3,' so there is much to gain by taking market share from the leaders," adding, "We are not greatly concerned."

Along with B2B market penetration, President Ryu announced plans to solidify LG Electronics' status as the undisputed No. 1 premium home appliance brand in the U.S., focusing on the 'triangular axis' of energy-efficient products and AI smart homes.

He emphasized, "LG Electronics is currently recognized as the undisputed premium home appliance brand in the U.S.," and added, "We will maintain our competitive edge in the U.S. market with quality and innovative technology recognized by the market."