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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] LG Electronics announced on July 7 that its second-quarter operating profit declined by more than 46% year-on-year, largely due to the impact of trade tensions and tariffs implemented under the former Trump administration.
According to the company’s preliminary earnings report, LG recorded KRW 20.74 trillion in revenue for Q2 2025, down 4.4% from the same period last year and 8.8% lower than the previous quarter. Operating profit fell to KRW 639.1 billion, representing a 46.6% decrease year-on-year and a 49.2% drop from Q1.
LG Electronics attributed the weaker performance to sluggish consumer sentiment in major markets and the intensification of U.S. trade policies in Q2, which led to increased tariff-related costs and heightened market competition.
While core businesses such as home appliances, automotive components, and HVAC systems maintained solid profitability, the Home Entertainment division, particularly TV sales, was significantly impacted. A combination of weaker market demand, rising LCD panel prices, and increased marketing expenditures due to intensified competition weighed on overall results.
The company also cited U.S. safeguard tariffs and steel/aluminum-related duties, along with higher logistics costs, as contributing factors. With production bases in Mexico and Vietnam, and a high proportion of exports to North America, LG Electronics has been particularly vulnerable to the global tariff environment.
In addition, since June 23, large appliances such as washing machines and refrigerators have faced up to 50% additional steel-related tariffs, further compressing margins. Given that steel accounts for 30–40% of production costs in large appliances, tariff shocks have been particularly severe.
Looking ahead, LG Electronics plans to focus on quality-driven growth through B2B HVAC solutions, subscription services, non-hardware businesses, and direct-to-consumer (D2C) sales in the second half of the year to drive profitability improvements.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
