LG Electronics CEO warns of potential U.S. price hikes

(LG Electronics)

LG Electronics Inc. may consider raising prices on U.S.-bound products if new tariff hikes overwhelm its ability to deal with costs, the South Korean home appliances maker’s chief executive officer said on Friday.

“If the tariffs seem too high for us to sustain, we may consider raising prices,” William Cho told reporters ahead of a special lecture at Seoul National University.

He added that expanding U.S.-based production would only be considered as a “last resort.”

The remarks come as the U.S. will impose a global baseline tariff of 10 percent on all U.S. imports after having suspended country-specific measures. LG Electronics is evaluating multiple scenarios, including shifting production sites or adjusting prices, in anticipation of further trade policy shifts.

The company already manufactures washers and dryers at its U.S. plant in Tennessee and appliances including refrigerators, cooking appliances, and TVs in Mexico, while its production list in Vietnam includes refrigerators and washing machines.

Cho said the company could absorb the blow through operational efficiency improvements, such as better inventory turnover. “We’ll take as much as we possibly can,” he said.

Cho noted that the full impact of new tariffs is expected to hit in the second quarter of 2025, adding that the first quarter did not show a significant “pull-in effect” from customers making early purchases to avoid potential price hikes and that “whether (performance) worsens or increases due to the tariffs, it will start in the second quarter.” There are already predictions that results in the second quarter, when changes in the global trade policy are reflected, will be slower than in the first quarter.

Regarding the timing of an initial public offering (IPO) by its Indian subsidiary, Cho said, “I do not know if it will be in June or another time, but as there is a lot of global uncertainty, I plan to wait and see for a few months,” highlighting that “the goal is not to earn a lot of money via this listing. We need to consider shareholder value and company value as well.”

LG Electronics is said to have recently completed the revision of the preliminary examination application for listing its Indian subsidiary and is reviewing the submission date.

Cho also introduced LG Electronics’ AI-based, innovative technology and future direction under the theme of “Innovation of Experience Completed with Technology” in this special lecture attended by about 200 students from Seoul National University’s Department of Electrical and Information Engineering.

The CEO introduced LG Electronics as “a company that provides diverse customer experiences, not a company that makes products,” explaining that “excellent products and advanced technology are important, but the essence of everything LG Electronics does is to provide differentiated experiences to customers.”

He added, “‘StanbyME’ started with a photo of customers lying in bed watching TV,” and explained why the research and development (R&D) field should also focus on experiences, drawing sympathy from the undergraduate students. He also introduced examples such as the world’s first wireless OLED TV, the ‘LG Signature OLED M.’

Cho told reporters after the lecture that “I wanted to tell these students that they should think broadly about customer experiences created with technology and the process by which they can improve the quality of life.”