Impact of US tariff measures on the Korean home appliance and smartphone industries and policy implications

Concerns are mounting among governments and businesses alike as the second administration of United States President Donald Trump continues to impose (and threaten to impose) high tariffs on a wide range of countries. The potential for tariff-driven market contraction, supply chain disruptions, and higher production costs is growing ever more likely, and high levels of policy uncertainty are making it increasingly difficult for companies to plan effective responses. Two product categories that are particularly exposed to tariff-related risks are home appliances and smartphones. Relatively few of these products are manufactured in the US, and imports of these goods are major contributors to the country’s persistent trade deficits, making them prime targets for protectionist measures. In response, South Korea’s LG Electronics is reportedly considering expanding its US production capacity, and has already significantly scaled back its manufacturing operations in Vietnam, which faces a proposed reciprocal tariff of 46 percent. This trend is not limited to Korean firms. Apple, faced with steep tariffs on products made in China — its largest manufacturing hub — is shifting production to lower-tariff countries such as India and Brazil. This report provides a qualitative analysis of the impact of the US tariff policy on the home appliance and smartphone industries.1) It examines current US import trends, Korea’s export performance, the global production structure, and assesses how specific product categories are affected.2) Finally, it offers policy recommendations aimed at minimizing the adverse impact of US tariffs and identifying ways to turn this challenge into an opportunity