November 22, 2024

• 

[THE INVESTOR] In what is seen as a serious blow to Korean tech giants Samsung Electronics and LG Electronics, the US government has decided to slap higher taxes on imported washers.

“I do not think there is anything we can do with the US government’s latest decision,” said a Samsung official, who declined to be named due to the sensitivity of the issue.

The US trade commission announced on Jan. 22 (local time) that it would impose a 20 percent tariff on the first 1.2 million of imported washing machines, and a 50 percent tariff on washers exceeding the 1.2 million units. The tax rates will decline to 16 percent and 40 percent, respectively, in the third year.

The trade action came after Whirlpool, which faced a strong challenge from its Korean rivals, requested the US International Trade Commission to investigate what it alleged was dumping by Samsung and LG in May last year. The ITC launched a probe and recommended safeguard measures to limit the imports of washers in November.

Korean Trade Minister Kim Hyun-jong vowed that the ministry would file a petition with the World Trade Organization.

“Based on my experience as a member of WTO’s Appellate Body, I think things are favorable for the Korean side,” Kim said in a meeting with government agencies and businesses to respond to the US trade restrictions.

The Korean presidential office Cheong Wa Dae has reportedly ordered the relevant government agencies to come up with a response. Among others, imposing retaliatory tariffs on imported goods from the US is a possible option for the Korean government to minimize the negative impact of the US restrictions. Some analysts, however, forecast the US government’s decision will eventually affect the Korean companies and the overall washer market.

“I am really not sure that any type of countermeasures from the Korean government would be effective,” said an industry source, who wished to be anonymous.

By Kim Young-won (wone0102@heraldcorp.com)