South Korean companies with manufacturing bases in Mexico are reviewing countermeasures in response to US President-elect Donald Trump's plan to impose a 25 percent tariff on imports from Mexico at the start of his second term.

Trump announced on social media Monday that he plans to issue an executive order to levy tariffs on goods made in Mexico and Canada on his first day in office, as part of his campaign to incentivize firms to relocate production to the United States.

Mexico has long been considered an optimal export hub for targeting the North American market due to its low labor costs and the benefits of the US-Mexico-Canada free trade agreement.

As of last year, South Korea ranked 11th in foreign direct investments in Mexico.

Samsung Electronics Co. operates a home appliance factory in Querétaro and a TV factory in Tijuana, while LG Electronics Inc. runs production facilities in Reynosa, Monterrey, and Ramos Arizpe.

"Since we also operate production bases in various regions outside the US, we are preparing countermeasures while considering various possibilities, including changes in trade policies," an electronics industry source said.

LS Cable & System Ltd., which broke ground on a new factory in Mexico in August, is also preparing response measures.

In the automotive industry, Kia Corp. operates a plant in Monterrey, producing 250,000 vehicles annually, of which approximately 150,000 units are exported to the US.

Auto parts makers Hyundai Mobis Co. and Hyundai Transys Inc. also maintain manufacturing facilities in Monterrey.

South Korea's trade ministry is closely monitoring trade policy developments in the US while assessing potential impacts from the anticipated tariff increase.

"Since Trump is still the president-elect, no immediate actions are being taken as of now," a ministry official said. "Any policy implementation, such as imposing tariffs, will only occur after his inauguration in January."

Trade Minister Cheong In-kyo recently met with companies operating in Mexico, emphasizing the government's commitment to minimizing business uncertainties by maintaining cooperation channels with Mexico's central and local governments where many South Korean firms are based.

The ministry is also watching the possibility of Vietnam becoming a target of US tariffs, as the Southeast Asian nation recorded the third-largest trade surplus with the US in 2023.

Vietnam is a major production base for many South Korean companies, with South Korea accounting for 17.9 percent of total investment and 24.3 percent of projects among Vietnam's 148 foreign investor countries. (Yonhap)