Samsung, the world's second-largest phone maker, produces around half of its handsets in Vietnam, and Trump's threat to impose a 46-percent tariff threat on the country sent shockwaves through the South Korean giant's supply chains.
“Our work goes on normally,“ agreed Le Van Binh, 30, adding that he hoped the Vietnamese government would be able to work out a deal.
Samsung turned to Vietnam because labour costs are “about one-tenth of those in South Korea”, Kim Dae-jong, a professor at Sejong University, told AFP.
If Samsung “fully absorbs” the proposed tariff cost instead of shifting production elsewhere “approximately four trillion won ($2.7 billion) -- or some 33 percent of its smartphone operating profit -- would be directly exposed”, said Kim Dong-won, managing director at KB Securities.
'Reallocating production'
“Despite the additional costs involved, this appears to be an inevitable decision to maintain or expand their presence in the strategically important US market,“ he said.
“Most of the TVs sold in North America are produced in Mexico,“ said Yong, which dodged Trump’s latest round of tariff threats -- potentially leaving Samsung in a better position than many rivals.
“We plan to overcome these challenges by reallocating production based on tariff conditions.”
The tariff threats appear to be aimed at securing additional foreign investment, but with the United States lacking a strong domestic base to produce the high-end chips that are the lifeblood of the global economy, many experts expect they will not last in the longer term.
Apple, Samsung's chief rival, produces the bulk of its iPhones in China.
However, “it is expected that the tariffs will be adjusted downward once a sufficient level of investment is secured”, Kang added.
In 2024, net exports accounted for more than 90 percent of South Korea's total economic growth.
Officials are scrambling to contain the fallout: Acting leader Han Duck-soo spoke to Trump this week, with the trade minister also flying to Washington for emergency talks.
Seoul must “focus on a proactive response to US tariff measures and swiftly implement a supplementary budget to stave off a deeper economic downturn”, Kang said.
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