Samsung has long had a manufacturing base in Mexico where it makes appliances like refrigerators and washing machines as well as products like TVs. These aren't just sold locally but the vast majority are imported and sold in the United States.
With President Trump imposing tariffs on imports to the United States, the price advantage that Samsung and others have enjoyed through selling products in the US that were made in Mexico is fast evaporating. That may just be why Samsung is now rethinking its investments south of the border.
Samsung is one of the oldest foreign corporations in Mexico
The Trump administration mentioned earlier this month that Samsung could shift some of its factories from Mexico to the United States. This would result in Samsung refrigerators and washing machines being made within the United States. LG is reportedly considering a similar move. Those products won't be cheaper than they are now when they're made in the US, rather, they could end up costing more due to the country's higher wages and cost of production.
It's believed that Samsung has decided to halt future investments in Mexico as tariffs have raised economic doubts about these investments. Samsung had previously planned to also shift refrigerator production from its Gwangju facility in Korea to Mexico, but that shift has now been halted as it's no longer feasible.
One of Samsung's largest plants in Mexico is located in Tijuana. Televisions are made at this plant. While Samsung hasn't confirmed anything regarding what would happen to the plant if the stringent tariff regime continues, there's concern among workers that Samsung might have to reduce production in Mexico and lay off workers.
Just this month, Trump imposed a 25% tariff on aluminum and steel imports. Steel is used heavily in refrigerators and these tariffs would most definitely cut into Samsung's margins on the product. As one of the country's oldest foreign corporate investors, there would certainly be many in the Mexican workforce that wouldn't want to see that happen.
