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Tackling safeguard measures

Jan 25,2018
Heavy tariffs on imports of residential washers and solar cells have become final after President Donald Trump gave a go-ahead to the decision by the U.S. International Trade Commission. The actions entirely favor U.S. electronics maker Whirlpool and American solar companies that petitioned for heavy tariffs on imports they accused of having seriously damaged their business.

Under the decision, any imports of residential washers within 1.2 million units would face tariffs of 16 to 20 percent. Solar cells and modules beyond 2.5 gigawatts also face tariffs of 15 percent to 30 percent over the next four years. Samsung and LG ship 3 million washers to the United States annually. About $1.3 billion worth of solar cells and modules are exported to the United States.

Under World Trade Organization rules, safeguard measures can be invoked upon a sudden surge in imports, serious damage to the domestic industry and major increases to the market share of imports on local products and business. The U.S. actions hardly meet the guidelines. Whirlpool’s bottom line has improved in recent years and it has not cut output or payroll due to its troubled business. The American solar panel industry is struggling not because of imports but from other energy sources such as shale gas and wind power. U.S. consumer groups have complained that higher import costs and trade limits would actually hurt American consumers. But the complaints fall on the deaf ears of the Trump administration which is pushing its American First agenda to increase jobs in the U.S.

The Korean government immediately filed a suit with the WTO. It also plans to take retaliatory actions on American imports under the norms of international commerce. It must join with China, Vietnam and Thailand, who were also hurt by the measure. The Trump administration is expected to expand its protectionist actions on other electronics, automobile and semiconductors. Seoul must make stern and effective measures to stop U.S. excesses. It must be smart in order not to stoke unnecessary trade frictions.

JoongAng Ilbo, Jan. 24, Page 30