SEOUL, April 25 (AJP) - LG Electronics is weighing potential price increases for U.S.-bound home appliances if tariffs imposed by Washington surpass what the company considers sustainable, according to CEO Jo Joo-wan.
Jo said that while the company is striving to offset the impact through operational efficiencies, it is preparing for a range of scenarios — including higher consumer prices.
“We will absorb as much as possible through operational efficiencies,” Jo told reporters Thursday ahead of a special lecture at Seoul National University. “But if tariffs rise beyond manageable levels, we may be forced to increase prices.”
The remarks come as the United States enforces a universal 10 percent tariff on imports, while reciprocal, country-specific tariffs remain temporarily suspended. However, LG is bracing for the possibility of broader levies and disruptions to its global supply chain.
Currently, LG manufactures washers and dryers at its Tennessee plant, while producing refrigerators, cooking appliances, and televisions in Mexico, and additional home appliances in Vietnam.
In the face of further tariff escalation, the company is contemplating relocating major production facilities to the United States, utilizing a swing production model to shift output across regions, or raising prices to offset increased costs.
“Building a production base in the United States is considered a last resort,” Jo said, noting that price adjustments and production realignment would be prioritized first. “We should follow sequential scenarios.”
During its first-quarter earnings call, LG said it had already developed a comprehensive tariff response strategy, including manufacturing cost improvements and customer consultations regarding potential price increases.
Jo also indicated that the full financial impact of tariffs is expected to emerge in the second quarter, with minimal front-loading of purchases by U.S. consumers in the first quarter.
“Whether performance deteriorates or improves due to tariffs, it will start from the second quarter,” he said.
In the first quarter of 2025, LG reported consolidated revenue of 22.74 trillion won ($16.8 billion) and an operating profit of 1.26 trillion won ($930 million).
Turning to the company’s plans for an initial public offering of its Indian subsidiary, Jo signaled a cautious approach amid global volatility.
“Whether it’s June or later, we want to wait a few months given the significant global uncertainties,” he said. “Our goal is not just to raise capital — we want the company to be properly valued and to enhance shareholder value.”
reporter
Candice Kim
candicekim1121@ajupress.com
Copyright ⓒ Aju Press All rights reserved.
View more comments