U.S. TARIFF PROPOSAL ON SAMSUNG, LG WASHERS
Step to protect Whirlpool’s business
THE United States International Trade Commission (ITC) on Tuesday recommended tariffs to keep Samsung and LG from flooding the US market with inexpensive washers, a step that will protect American appliance giant Whirlpool Corp.
The ITC said a graduated tariff rate should be placed on imports of large residential washing machines above a 1.2 million-unit threshold over the next three years, starting at 50 per cent the first year and sliding to 40 per cent by the third.
The panel was split on whether tariffs should be imposed if fewer than 1.2 million units were imported in any given year.
US President Donald Trump is expected to make a decision on the recommendation by early next year.
The ITC found last month that surging imports harmed domestic producers, although it did not find that washers made specifically in South Korea, already subject to anti-dumping duties, were responsible.
Samsung Electronics and LG Electronics said any tariff would raise prices, limit consumer choices and hurt job creation.
The South Korean firms plan to open home appliance factories in the United States in the next few years, which could cushion the blow from possible import tariffs.
The company was projected to sell about 1.2 million washing machines in the US this year, said an LG spokesman. He added that combined US sales by LG and Samsung would reach about 2.5 million, well above the recommended quota.
Lawmakers from South Carolina, where Samsung is building a factory, had written to the ITC to ask that any remedies not be too severe.
South Korea’s trade ministrysaid the government planned to consider whether or not to complain to the World Trade Organisation depending on Trump’s final decision on the tariffs.
Whirlpool brought the case under Section 201 of the US Trade Act of 1974 seeking “global safeguard” restrictions to protect its market.
Meanwhile, shares of South Korean appliance makers rose as investors shrugged off a recommendation to impose tariffs on foreign-made washing machines.
Commissioners, at a hearing on Tuesday, offered a range of choices within a three-year quota system for Trump.
The case is a test of Trump’s vow to crack down on countries that don’t follow international trade rules.
While Samsung’s washing machine business could be hit by tariffs, the overall impact on the conglomerate would be negligible, according to Morningstar analyst Dan Baker.
“It makes a tiny proportion of its profits from washing machines,” he said. Bloomberg