Trump's Vietnam tariff deal prevents the worst for Samsung, for now

General

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President Trump announced sweeping tariffs back in April this year with Vietnam, where most Samsung phones are made, being hit with a 46% rate. This meant that products made there couldn't be sold in the US unless that 46% tariff was paid to the government first.

The tariffs were soon paused for 90 days as the US administration began trade talks with the countries impacted to arrive at an agreeable solution. The US has concluded a trade deal with Vietnam that now subjects exports to the US to a lower 20% tariff rate.

Samsung could probably afford to keep prices stable in the US

Samsung phones and tablets destined for the United States are typically made in Vietnam. The 46% tariff would have been a disaster for Samsung. It would either have to eat the tariff and reduce its profit margin or raise prices for customers.

The company also considered exporting devices to the US from its manufacturing facilities in India as the country had a lower initial tariff rate. The US hasn't struck a deal with India yet and if the tariff rate is lower than Vietnam's 20%, Samsung could still proceed with that plan to reduce the overall impact of this tariff regime.

A 20% tariff on its device imports to the US is far from an ideal outcome from Samsung, but at least it saves the company from the worst, for now. President Trump had also floated an idea of imposing 25% tariffs on smartphones sold in the US that are made outside the country, naming Apple and Samsung specifically.

The possibility of that happening remains slim as there isn't really any ecosystem or supply chain to support phone manufacturing at such scale in the US.

Adnan Farooqui - Executive Editor

[email protected]

First Samsung device: SGH-E900

Adnan Farooqui is a long-term writer at SamMobile. Based in Pakistan, his interests include technology, finance, Swiss watches and Formula 1. His tendency to write long posts betrays his inclination to being a man of few words.

Via General United States Vietnam

Trump's Vietnam tariff deal prevents the worst for Samsung, for now

Samsung could probably afford to keep prices stable in the US

Adnan Farooqui - Executive Editor

[email protected]

First Samsung device: SGH-E900

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