With around a month to go before US President Donald Trump makes a final decision on restrictions on imported washing machines, Samsung, LG and the South Korean government made a concentrated effort to argue that Washington’s latest plan to impose strong tariffs on their washers would do more harm than good.
During a hearing held by the US International Trade Commission on Wednesday, the Korean side made a final appeal, saying the trade restrictions would hurt American consumers and hamper US job creation, given the firms’ plans to build local plants and strong demand for their washers in the US.
“We finalized plans to establish home appliance production in Newberry, South Carolina, that will employ nearly1,000 workers and produce over 1 million washers next year,” said John Herrington, senior vice president of Samsung Electronics America’s home appliance division, during the hearing.
“If we are unable to offer our full range of products to retailers and consumers during our ramp-up (due to the safeguard), we will lose floor space and sales, impacting the success of our South Carolina operation,” he added.
He said the ultimate impact of tariffs would be a lose-lose scenario for US production, US employment and US consumers.
LG also said no import restrictions are needed, as LG and Samsung will be producing washers in the United States.
“(Due to the safeguard), LG and Samsung washer imports to serve the North American market will drop from 30 percent to 4 percent by next year,” a LG Electronics spokesperson said.
“We urge the US Administration to reject Whirlpool’s self-serving proposal, which will be harmful to Tennessee, jeopardize US jobs and hurt the US economy,” the firm said.
The Korean government also attended the hearing to back the firms’ position, calling on the US government to exclude Korean washers from any remedy measure.
“If the US takes action against the agreement of the World Trade Organization in order to protect the local industry, it will be abuse of import restrictions and negatively impact the benefits of the US imports,” said Kim Hee-sang, deputy director-general of the Ministry of Foreign Affairs.
The trade dispute dates back to May, when Whirlpool filed a petition with the USITC, seeking restrictions to stop Korean firms from flooding the US market with cheaper washers. A safeguard law is a restraint on international trade to protect home industries from foreign competition.
In November, the USITC ruled in favor of Whirlpool to impose a graduated tariff rate on imports of large residential washing machines in excess of the 1.2 million-unit quota over the next three years.
Based on Wednesday’s hearing, the USITC will report detailed measures of the safeguard to US President Donald Trump, who will make a final decision around next month.
Samsung and LG’s combined share of the washing machine market in the US rose to 31 percent in the first half of 2017 from 23 percent in 2014, while Whirlpool’s share dropped to 37 percent from 41 percent in the same period, according to US market research company TraQline. The two Korean firms are estimated to have shipped $1 billion worth of washing machines to the US in 2016.
Amid growing protectionism in the US, Samsung and LG announced last year that they would build plants for their home appliances in the US. In June, Samsung announced it would invest $380 million in building a new plant in South Carolina by 2020. In March, LG said it set aside $250 million to build a plant in Tennessee by 2019. – The Korea Herald