TV Sets – USA’s Reciprocal Tariff Policy to Rebalance Global Trade Flows

In this blog, Omdia's Patrick Horner and examines the impact of the April 2, 2025 White House Executive Order on the TV supply chain. We analyze the new tariff rates, their effects on manufacturing strategies, and the resulting opportunities and challenges for key industry players. The blog also offers strategic considerations for TV brands and suppliers navigating this evolving trade landscape.

On April 2, 2025, the White House issued the executive order "Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits." This policy shift has influenced the outlook for TV brands and the broader TV supply chain. Figure 1 (below) shows US imports of TVs by country of origin from the years 2013-2024. Over the years 2018-2024, TV assembly capacity was gradually migrated from China to Mexico and to a lesser extent Vietnam. Mexico is now the most important US TV import country of origin.

Key Implications for the TV Supply Chain: A Complete Reversal for Mexico-Based Manufacturing

One month ago, TV brands with manufacturing operations in Mexico began exploring alternative production locations in response to the proposed 25% tariff on Mexican goods entering the United States. Vietnam and Southeast Asia emerged as favorable locations for production offering comparatively low US import tariffs at 3.9%. The recent White House announcement has altered the previous stance on tariffs. Figure 2 (below) illustrates the tariff rates by country based on the most recent executive order regarding reciprocal tariffs. China would face a cumulative tariff of 65.4% and Vietnam would have a tariff of 49.9%. Mexico due to the United States of America, -Mexico-Canada Agreement (USMCA), will maintain eligibility for tariff-free entry into the U.S. market at 0%. TV sets are included in the USMCA agreement and are categorized as ‘compliant goods’ which are protected by the 0% tariff agreement.

• Brands with factories in Mexico (Samsung, LG, Sony, , and Hisense) are in a favorable position, as their supply chains remain stable without significant disruption. TCL production capacity in Mexico is limited and a significant portion of its production has been moved to Vietnam, which may present challenges.
• Walmart ONN benefits from its U.S. production through Element, providing it with a unique advantage in avoiding additional tariffs. Element’s US factory currently lacks the capacity to cover more than 30-40% of ONN’s annual production needs. Additionally, Element’s MKD parts  are sourced from China making them subject to a 65.4% tariff.
• Chinese OEMs without factories in Mexico face challenges and will need to explore alternative solutions to maintain cost competitiveness.

Opportunities for Key Players
This policy shift creates new opportunities for manufacturers and suppliers with operations in Mexico:

• Foxconn and TPV are well positioned to secure orders from Chinese OEMs seeking to mitigate the impact of tariffs by utilizing their Mexican facilities.
• Local Mexican manufacturers, such as ADI, could see increased demand as brands seek to leverage this capacity.

Understanding the Nature of the New Tariffs: The key takeaway from the executive order is found in Section 2:

"These additional ad valorem duties shall apply until such time as I determine that the underlying conditions described above are satisfied, resolved, or mitigated."

This wording indicates that these tariffs are primarily a negotiating tactic aimed at influencing trade behavior and could be lifted as quickly as they were imposed.

Strategic Considerations for TV Brands and Suppliers

While short-term reactions may drive immediate shifts in procurement strategies, long-term supply chain decisions should not be an overreaction to short-term policy changes. Companies should adopt a balanced approach:

1. Diversification of Manufacturing – Maintaining flexibility between multiple manufacturing hubs (Mexico, Southeast Asia, and developing domestic U.S. capacity) remains crucial.
2. Leveraging Partnerships – OEMs and suppliers with Mexican operations should seize the opportunity to secure new business from competitors affected by the tariffs.
3. Monitoring Policy Shifts – Given the fluid nature of tariff policies, supply chain executives must stay informed and adaptable to rapid changes.
4. Assessing Localized Production – Walmart ONN’s U.S.-based capacity through Element highlights the potential benefits of nearshoring for brands willing to invest in domestic manufacturing.

Final Thoughts

The April 2, 2025, executive order has significantly reshaped the competitive landscape for TV manufacturers. Companies with existing operations in Mexico are now well-positioned to capitalize on the shift, while those without a Mexican presence face new challenges. However, because these tariffs are inherently negotiable, companies should refrain from making hasty supply chain decisions. Instead, they should adopt a strategic, long-term approach that balances cost, risk, and operational flexibility.

As the trade landscape continues to evolve, we will provide our insights and recommendations to help TV brands and supply chain partners navigate this complex environment.