An increasing number of South Korean manufacturers are considering relocating their production facilities to the United States with regard to high U.S. tariffs and Japan’s export restrictions targeting South Korea. A shortened workweek, a rapid increase in minimum wage and militant labor unions in their home country are leading to their increasing investments in the United States, too.
Samsung Electronics, which put a washing machine manufacturing plant into operation in South Carolina last year, is expected to expand its consumer electronics production lines there. The company is also planning to raise the ratio of semiconductor production in the United States.
Hyundai Motor Group is going to invest 705.3 billion won in Hyundai Motor America this year. The amount is more than twice last year’s and the largest among scheduled investments in its overseas corporations. SK Group is concentrating its investment on batteries and shale gas in the United States and LG Group is increasing the ratio of consumer and automotive electronics production in the United States.
This trend is because the United States is currently the safest haven in the world where they can avoid trade wars. In addition, the Donald Trump administration is providing various incentives for companies investing and creating jobs in the United States.
The Ministry of Economy and Finance recently announced that South Korea’s overseas direct investment totaled US$14.11 billion in the first quarter of this year, an all-time high since records began in 1981. On the other hand, the foreign direct investment in South Korea in the first quarter fell 15.9 percent from a year ago to US$2.62 billion.