With 50% Tariff on Steel Imports, Home Appliance Makers Set to Ramp up US Production

NEW YORK, July 10, 2025 — Home appliance brands have never needed a special occasion to launch their range of new products in the US market.

Be it the indigenous home appliance and electronics players or South Korean manufacturers, their foray into the US market, was always marked by frequent product innovations.

Led by a robust research and development, based on current consumer demands, the likes of Samsung Electronics and LG Electronics have, with time, evolved in the US market.

However, the levy of 50 percent tariffs on steel imports by President Donald Trump led government, effective August 1, has caused concern for the likes of LG and Samsung.

From refrigerators, washing machines, dish washers to small kitchen appliances, appliances across categories are set to get costlier.

While companies have sharply reacted to the tariff hike announcement, they are re-strategizing production and marketing plans.

The tariff hike has come at a time, when companies were focusing on integration of new-age technologies in their range of products.

Besides, a continuing commitment of making energy efficient products, has been a key concentration for the home appliance makers.

LG has also shown interest in applying private 5G and automation across the board using smart applications, AI, computer vision, digital twins and robotics for a more efficient manufacturing process.

Korean Makers’ Ramp up Production

The levy of tariffs will see a ramped-up production by South Korean appliance and electronics giants in their plants in US.

Media reports said that LG Electronics Inc. is actively considering adding new manufacturing lines near its only US appliance manufacturing plant in Tennessee to churn out refrigerators there.

The Korean tech giant currently produces front-load and top-load washing machines and dryers from the plant’s four lines in Clarksville, TN, which opened in 2018.

The new facility to produce refrigerators is expected to be built on an idle plot of land next to the plant.

An increased output is expected to bring down not only LG’s logistics costs but also tariffs on its goods shipped to the US.

Both Samsung and LG have a manufacturing presence in the US.

However, bulk of their appliances are produced in South Korea, Vietnam, and Mexico before being shipped to American consumers.

The new tariffs are likely to hit Samsung and LG’s export-dominated business models.

Company officials said they are conducting detailed impact assessments and reviewing a range of strategic responses, from price hikes to shifts in production geography.

Steel is a critical component in large appliances, meaning the tariffs are likely to increase production costs significantly.

Earnings Take a Hit

LG Electronics Inc. reported the second quarter earnings having nearly halved after the Trump administration's tariff hikes jacked up raw material costs, making its products more expensive.

The company's operating profit decreased 46.6 percent to 639.1 billion won ($467 million) in the April-June quarter from the year prior on a consolidated basis.

Compared with the previous quarter, profit tumbled 49.2 percent, missing the market consensus of 753.3 billion won, according to Yonhap Infomax.

Revenue edged down 4.4 percent year-on-year to 20.74 trillion won in the second quarter. Quarter on quarter, it dropped 8.8 percent.

Companies to Pass on Price Burden

After President Trump imposed steel tariffs in 2018, appliance maker Whirlpool faced an unexpected $350 million jump in costs, which it said was driven by the increase in steel prices.

Companies unable to absorb such costs would likely pass them on through higher prices in the shops.

The range of imported household appliances, likely to be hit by US's expanded steel tariffs, include dishwashers, washing machines, refrigerators.

Notably, the Department of Commerce has said that the steel duties, which are currently at 50 percent, will apply to so-called “steel-derivative products” starting.

Newly affected items include combined refrigerator-freezers, small and large dryers, washing machines, dishwashers, chest and upright freezers, cooking stoves, rages and ovens, food waste disposals and welded wire racks.

The duties will apply to the value of the steel content in each import, the Department of Commerce notice said, meaning items with higher steel content will face higher tariffs. The decision comes just a week after Donald Trump hiked tariffs on imported steel and aluminium to 50 percent.

LG Electronics Inc. is actively considering adding new manufacturing lines near its only US appliance manufacturing plant in Tennessee to churn out refrigerators there.

Inputs from Saqib Malik

Editing by David Ryder