US trade tariffs slammed in Asia

TRUMP’S MOVE IS BODY BLOW TO COMPANIES China warns move will harm global trade environment.

South Korea and China protested yesterday 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.

The United States’ stance has put a cloud over global trade at a time when its revival has fueled hopes for a stronger world economy. But economists believe the United States will avoid taking measures that could impact US companies’ global supply chains, such as 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 3 million washing machines annually to the United States, with sales of around $1 billion, and they hold a quarter of a US market that has been dominated by Whirlpool and General Electric Co.

South Korean Trade Minister Kim Hyun-chong said the new US tariffs violated World Trade Organisation rules.

“The United States has opted for measures that put political considerations ahead of international standards,” Kim told a meeting of industry officials.

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 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.

Mexico said it would use legal means to ensure Washington met international obligations, pointing to the North American Free Trade Agreement.

The tariffs on washing machines exceeded the harshest recommendations from International Trade Centre members, while the solar tariffs were lower than domestic producers had hoped for.

Washington will impose a 20% tariff on the first 1.2 million imported large residential washers in the first year and a 50% tariff on additional imports. The tariffs decline to 16% and 40% respectively in the third year.

A 30% tariff will be imposed on imported solar cells and modules in the first year, with the tariffs declining to 15% by the fourth year. The tariff allows 2.5 gigawatts of unassembled solar cells to be imported tariff-free in each year.

A filing published by the World Trade Organisation on January 12 showed Seoul had already asked for authorisation to impose annual trade sanctions worth at least $711 million on the US, in response to the dispute over washing machines.

South Korea also asked for permission to impose open-ended trade sanctions if Washington broke the same rules again with regard to other products.

Both Samsung Electronics and LG Electronics expressed concern, saying the tariffs would hurt American consumers and jobs.