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Stiff duties proposed on washers

Nov 23,2017
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A U.S. trade panel Tuesday called for tariffs of 50 percent on large residential washing machines to prevent Samsung and LG products from dominating the U.S. market. It recommended a yearly quota of 1.2 million units and the stiff tariffs would apply to any imports above that level.

The U.S. International Trade Commission also recommended the 50 percent tariff on imports of parts for such machines over a yearly import quota of 50,000 units. The commission called for all the tariffs to continue for one year, fall to 45 percent in the following year and to 40 percent in the year after that.

“For U.S. imports of large residential washers that exceed 1.2 million units, the Commissioners recommend a tariff rate of 50 percent,” the commission stated in a press release posted on its website.

The recommendations go to President Donald Trump, who was elected on a protectionist “America First” platform.

For parts, it recommended the import quota to be raised to 70,000 units in the second year and 90,000 in the third.

While the four-member panel unanimously agreed on a 50 percent tariff on washer machines exceeding the annual quota, it was split on new tariffs for machines within the quota.

Commission Chairman Rhonda Schmidtlein and Commissioner Irving Williamson proposed a 20 percent tariff for the first year for the 1.2 million units, which would slide to 15 percent in the third year. Commissioners David Johanson and Meredith Broadbent called for no tariffs on those machines.

The panel’s recommendations came six months after Michigan-based Whirlpool filed a petition in May accusing the two Korean companies of dumping washing machines on the U.S. market. It proposed a tariff of 50 percent on imported washers over the next three years. Whirlpool also asked for tariffs on parts to keep Samsung and LG from importing parts and assembling final units in the United States, a demand reflected in the commission’s remedy recommendations.

Trump is expected to decide whether to accept or reject the recommendations early next year.

The Korean government Wednesday held a meeting presided over by Kang Sung-chun, a deputy trade minister, with executive officials from LG and Samsung in Seoul to prepare the next move in the wake of the commission’s recommendations.

In a statement released Wednesday, LG Electronics said the decision stemmed from “Whirlpool’s third effort to use government trade actions to restrain competition.” Pointing out that both LG and Samsung are now building washing machine factories in Tennessee and South Carolina, with the former expected to create 600 new jobs, it said putting in place restrictions on imported washers “will only hurt consumers by raising prices and decreasing choices, while jeopardizing U.S. investment, innovation and job growth.”

Samsung and LG’s combined share of the U.S. washing machine market jumped from 22 percent in 2012 to 35 percent at the end of last year, according to market research firm TraQline, while Whirlpool’s fell from 40 to 35 percent.

BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]