Samsung Electronics and LG Electronics are reviewing their frenetic production schedules in Vietnam after US President Donald Trump slapped a steep 46% tariff on imports from the Southeast Asian nation.

The US leader’s “reciprocal tariffs” include a 25% duty on imports from South Korea, where the two electronic giants are based. Both tariffs have been put on a 90-day pause until July.

Following the US announcements, LG Electronics has suspended plans to expand microwave and refrigerator production in the northern Vietnamese port city of Hai Phong, where most of the Korean group’s production facilities in the country are based.

The suspension has affected around 400 workers at the facility, according to a report from the Hai Phong Economic Zone Authority ( Heza ). Trump’s tariffs will increase costs for exporters, and this will lead to reduced profits, competitiveness, and market share in the US market, the report says.

Factory profits drop

LG Electronics’ 2024 performance review shows that the Hai Phong production facility posted a revenue of 5.63 trillion won ( US$3.88 billion ), up 9.79% from the previous year. Post-tax profit grew 15.68% to 173.9 billion won. As of last year, the group’s investment in Vietnam has reached US$8.24 billion.

Meanwhile, Samsung Electronics’ consolidated financial statements for 2024 show a profit of US$25.3 billion in 2024, up 122% from the previous year. However, the total profit of its four major factories in Vietnam fell 11.4% to US$3.2 billion.

The four major facilities are Samsung Electronics Vietnam Thai Nguyen, Samsung Display Vietnam, Samsung Electronics Vietnam, and Samsung Electronics HCMC CE Complex. Altogether, they accounted for 25% of Samsung’s global revenue last year.

In addition, Samsung has two smaller plants, a sales entity and a US$220 million R&D centre in Vietnam, where it is the largest single foreign investor, with a total registered investment capital of US$23.2 billion. The total number of Vietnamese vendors in the Samsung Vietnam’s ecosystem has reached 306. The group produces more than 60% of its phones sold globally in Vietnam.

According to Reuters, the impact of Trump’s tariffs could be greater on Samsung’s smartphone business than on its TV business, as most of the TV sets it sells to North America are produced in Mexico.

Closer cooperation

On April 16, Vietnamese Prime Minister Pham Minh Chinh met with South Korean foreign minister Cho Tae-yul, who was attending the 2025 P4G Vietnam Summit.

The conference, attended by global leaders and financial executives, sought to “provide global leaders with the latest insights from the entrepreneurs and investors who are driving global financial commitments into real investments in nationally aligned and locally based climate ventures”. 

Vietnam and South Korea agreed to cooperate closely after the announcement of the US tariffs, which pose a major challenge for the two economies and major companies like Samsung Electronics and LG Electronics. According to estimates from the Vietnamese government, Samsung Electronics imports from Vietnam reached US$54 billion last year, representing about 15% of the country’s total exports.

The two countries are seeking to raise bilateral trade to US$150 billion by 2030 in a “more balanced and sustainable manner” and further facilitate the access of goods to each other's markets, says Vietnam’s Ministry of Foreign Affairs. While encouraging Korean companies to expand business and investment in Vietnam, the Southeast Asian production hub has identified its priorities for Korean firms as infrastructure, electronics, semiconductors, high technology, and renewable energy.

In the electronics sector, Apple’s iPads, MacBooks, and AirPods are produced in Vietnam by partners like Foxconn, Pegatron, Goertek, Luxshare, and Wistron.