LG Electronics has issued a stern warning that it may halt all investments in Vietnam if the U.S. maintains its high tariffs on Vietnamese imports. The increased tariffs could severely damage export competitiveness, prompting global firms like LG to reevaluate their investment strategies.
According to Hai Phong authorities on the 14th, the Hai Phong Economic Zone Management Committee, chaired by Le Trung Kien, held an emergency business meeting on the 11th (local time) to discuss countermeasures against U.S. tariff measures. The session brought together around 100 participants, including major foreign direct investment (FDI) firms such as LG Electronics and Taiwan’s Pegatron, along with customs and tax officials.
Kim Wan-ki, head of LG Electronics Hai Phong’s business management division, expressed concerns, stating, “We had plans to expand our factory in the Trang Due Industrial Park this year and next. However, if the tariff issue prolongs, we will have to reconsider our investment decisions due to the U.S. tariffs.”
He added, “Fortunately, the Vietnamese government has begun preliminary negotiations with the U.S., leading to a 90-day deferral of the tariffs. We hope to use this time for positive negotiations. We also confirmed the government’s swift response and local authorities’ willingness to support during this meeting.”
While details of LG’s investment plans remain undisclosed, they are believed to include expanding production capacity and strengthening R&D in Hai Phong. LG is currently expanding its P3 factory and constructing a new P4 factory in the area. The P4 facility, set to begin operations later this year, will be LG’s first oven production line in Vietnam.
The Hai Phong Economic Zone Management Committee acknowledged that the U.S. tariffs are negatively impacting the investment climate in Hai Phong and across Vietnam, prompting urgent countermeasures. To diversify export markets, the government plans to strengthen support for trade with FTA partners like the EU, Japan, and South Korea. Additionally, Vietnam is negotiating with the U.S. to adjust tax rates and considering income tax cuts and other incentives for affected businesses.
The committee’s internal survey found that 64 out of 130 Hai Phong-based exporters ship directly or indirectly to the U.S. The estimated damage from the high tariffs amounts to about $2.8 billion. Indirect exports to the U.S. market total $6.1 billion, accounting for roughly 80% of Hai Phong’s total exports.
Le Trung Kien emphasized, “Many firms have already canceled or delayed U.S. export contracts due to the tariffs. Rising costs and falling profits are leading to production cuts and investment withdrawals. Companies must enhance origin transparency, strengthen domestic supply chains, accelerate digital transformation, and improve brand competitiveness to fundamentally reform export structures.”
President Trump officially announced his “reciprocal tariff” policy on the 2nd, imposing a baseline 10% tariff on all imports, with higher rates for key trade partners—South Korea (26%), Vietnam (46%), the EU (20%), and Japan (24%). While the steep tariffs were initially set to take effect on the 9th, the U.S. granted a 90-day grace period (excluding China), during which only the 10% rate applies. If negotiations fail, country-specific higher tariffs will be enforced.
Meanwhile, LG Group is Hai Phong’s largest foreign investor, with LG Electronics, LG Display, LG CNS, LG Chem, and LG Innotek operating major facilities there. These firms account for 43% of the city’s total exports, with cumulative investments reaching $8.24 billion.
LG Electronics established its “LG Hai Phong Campus” in 2014, producing TVs and home appliances. As of 2022, the Hai Phong facility contributed 15% of LG’s global set and component production, with annual output valued at $12 billion. Expansion plans suggest further production growth ahead.
