U.S. President Donald Trump has warned that foreign companies could face tariffs of up to 300% if they do not build factories in the United States within 18 months. This threat is deepening concerns within the domestic manufacturing sector. While major industries like automotive and battery production have already established large-scale facilities in the U.S., some sectors, such as power equipment and wiring, show significant disparities in localization levels among companies, leading to increased pressure for additional investments.
According to industry sources, during a campaign rally in Ohio on October 3, Trump stated, "I am giving foreign companies about a year and a half to build factories here. If they fail to do so, I will impose tariffs of 150%, 200%, 250%, and even 300%."
In the power equipment sector, companies with established U.S. production bases are in a different position than those relying on domestic manufacturing. Hyosung Heavy Industries began local production in 2020 and is continuously expanding its capacity in the U.S. HD Hyundai Electric is also producing high-voltage transformers in Alabama and started construction on a second plant in March. LS Electric has a production base in the U.S., but its local manufacturing focuses on distribution equipment like switchgear and panels. In contrast, Iljin Electric only has a sales office in the U.S. and produces key products like high-voltage transformers at its facility in Hongseong, South Korea, for export.
The wire industry also exhibits varying levels of localization. LS Cable is constructing the largest submarine cable production plant in the U.S. in Chesapeake, Virginia, aiming for completion in the second half of 2027 and commercial production in the first quarter of 2028. Korea Electric Power Corporation operates sales offices and branches in the U.S. to expand its high-voltage power grid business but currently lacks a cable production facility in the country, relying on its main production base in Dangjin, South Korea.
Doosan Enerbility does not have a local production base in the U.S., but it does not anticipate issues arising from Trump's comments. The company has been a key supplier of major equipment, including reactor pressure vessels and steam generators, for Westinghouse's AP1000 nuclear power plants in the U.S. Industry insiders believe that Doosan's involvement in the U.S. nuclear construction expansion, sharing supply chains with local companies, differentiates its interests from those of simple export firms.
Companies are hesitant to commit to expanding local production due to costs and productivity concerns. The U.S. has higher labor costs than South Korea, and securing skilled labor for manufacturing has been a persistent challenge. Taiwan's TSMC has also cited labor shortages and infrastructure constraints as major hurdles in expanding its semiconductor plant in Arizona.
An industry representative stated, "It is essential to closely monitor changes in U.S. tariff policies while considering whether to expand local production facilities. Decisions should be made by comprehensively evaluating labor costs, workforce availability, and productivity."
* This article has been translated by AI.
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