November 22, 2024

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[THE INVESTOR] The US International Trade Commission determined on Oct. 5 that two South Korean companies‘ washing machines manufactured in foreign countries were harming the US industry.

The trade body announced the result of its four-month investigation prompted by a safeguard petition Whirlpool Corp. filed May 31 against Samsung Electronics and LG Electronics.

The appliance giant accused the Korea rivals of moving manufacturing operations to Vietnam and Thailand, respectively, to circumvent US anti-dumping tariffs imposed on their large residential washers. 

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“The US International Trade Commission has determined that large residential washers are being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or threat of serious injury, to the domestic industry producing an article like or directly competitive with the imported article in the United States,” the commission said on its website. The decision does not affect washers made in South Korea or any other US free trade partners.

The investigation will move to a remedy phase, and a public hearing is scheduled for Oct. 19.

The commission plans to announce its remedy recommendations at the conclusion of the phase, and forward them to President Donald Trump by Dec. 4.

Remedy measures may include an increase in a duty, imposition of a quota, imposition of a tariff-rate quota, trade adjustment assistance, or any combination of such actions, according to the commission.

The US president is expected to make a final decision by early next year, taking into account the commission’s report, industry efforts to make a positive adjustment to import competition, and factors related to the national economic interest of the US.

Samsung and LG exported a combined $1 billion worth of large residential washing machines to the US last year, holding some 16 percent and 13 percent, respectively, of the market led by Whirlpool with 38 percent.

Samsung Electronics expressed disappointment in the decision, claiming the ITC‘s decision will have an adverse impact on US consumers.

“Restrictions on imports of Samsung washing machines will negatively affect American consumers by limiting choices, raising prices, and offering less innovative washing machines,” Samsung said through a statement.

Samsung added the company has been delivering innovative products, which are “made by Americans, and sold to American consumers.”

“We believe that safeguard remedies should not discriminate in favor of one group of US-based workers over another and should not negatively impact a fair appliance marketplace for consumers,” it added.

An official from LG Electronics also said US consumers and retailers will face damage if Washignton actually decides to impose regulations on its products.

Despite such possible impact, LG Electronics said the ITC’s decision will not affect its plan to invest US$250 million to build a washer factory in Tennessee. Construction is to be completed in the first quarter of 2019, with an annual production capacity of 1 million units. 

By Park Ga-young and newswires (gypark@heraldcorp.com)