Asia fears US tariffs on washing machines, solar panels just the start
SEOUL/BEIJING: South Korea and China protested against US President Donald Trump slapping steep import tariffs on washing machines and solar panels in a move that stirred fears in Asia of more protectionist measures coming out of Washington.
For all his rhetoric to win votes, Trump’s actions on trade during his first year had been less alarming than many outside the country had feared – until now.
“It shows that the US administration, after taking its time, it’s now indeed starting to roll out measures restricting trade with the idea of living up to the promises made during the electoral campaign,” said Louis Kuijs, head of Asia economics at global consultancy Oxford Economics, in Hong Kong.
“This could very well be just one step of many,” said Kuijs, predicting steel and aluminium imports could be on Washington’s target list.
The US’ stance has put a cloud over global trade at a time when its revival has fuelled hopes for a stronger world economy.
But, at least, economists believe the US will avoid taking measures that could impact US companies global supply chains, particularly for cars and electronics.
The tariffs on washing machines, meantime, have dealt a heavy blow to South Korea’s Samsung Electronics and LG Electronics.
Together they ship between 2.5 million to three million washing machines annually to the US, with sales of around US$ 1 billion, and they hold a quarter of a US market that has been dominated by Whirlpool and General Electric Co.
South Korea’s trade minister Kim Hyun- chong said the new US tariffs violated World Trade Organisation rules.
“The US has opted for measures that put political considerations ahead of international standards,” Kim told a meeting of industry officials.
“The government will actively respond to the spread of protectionist measures to defend national interests.”
China, the world’s biggest solar panel producer branded the move an “overreaction” that would harm the global trade environment for affected products.
“The US’s decision ...is an abuse of trade remedy measures, and China expresses strong dissatisfaction regarding this,” Wang Hejun, the head of the commerce ministry’s Trade Remedy and Investigation Bureau, said in a statement on its microblog.
“China will work with other WTO members to resolutely defend its legitimate interests in response to the erroneous US decision.”
China’s Ministry of Industry and Information Technology ( MIIT) said the outlook for solar firms’ expansion overseas was not optimistic, because of protectionist sentiment, as Chinese solar panels are a key target of global trade investigations.
China still encourages firms to build factories overseas and expand businesses abroad at an appropriate time and scale, the MIIT said in a statement, adding that firms would have to tackle trade disputes properly in cooperation with authorities.
Mexico said it would use legal means to ensure Washington met international obligations, pointing to compensation envisaged under the North American Free Trade Agreement.
India has recently re- opened a US dispute, alleging Washington has failed to comply with a ruling on solar power.
Vietnam has also challenged US anti- dumping measures against exports of fish fillets, according to a WTO filing. — Reuters