LG plans to file complaints against US ruling

LG Electronics shares down on concerns over losing share

By Kim Yoo-chul

LG Electronics plans to file complaints to the United States International Trade Commission (USITC) against a ruling that both LG and Samsung Electronics were engaged in unlawful dumping of washing machines in the United States.

In a preliminary report Wednesday, the U.S. Department of Commerce (DoC) said Samsung and LG will be required to anti-dumping duty on the products imported into the United States from their production facilities in China.

According to the DoC, the anti-dumping duty rate for Samsung is 111.09 percent, while the rate for LG is 49.88 percent. The U.S. government agency decided to apply Samsung’s dumping rate retroactively 90 days to remedy its recent efforts to stockpile washers.

“LG Electronics plans to bring the preliminary DoC ruling to the USITC as the anti-dumping duty was excessively high,” a senior executive said, Thursday. “LG plans to argue that our clothes washers manufactured in China aren’t harming the U.S. market.”

The United States is the most crucial market for LG Electronics’ home appliances business. LG competes with Whirlpool and Samsung Electronics.

Samsung Electronics said it was considering taking further action. “We want to clarify that Samsung didn’t engage in any unfair trade practices and the latest DoC ruling disappointed the company,” it said.

Shares of LG Electronics were down 2.76 percent to close at 52,800 won on the Seoul bourse, Thursday, while Samsung Electronics gained 0.19 percent to end at 1,543,000 won, data from Korea Exchange said.

As the ruling is expected to provide more benefits to Whirlpool, Samsung said the ruling may limit fair market competition between manufacturers in the United States.

The preliminary ruling by the DoC is an official response to a petition filed earlier by Whirlpool in December, 2015.

The petition outlines a long-term, repeated pattern of pricing below cost by LG and Samsung Electronics and their payment of less for tariffs, helping them get a bigger market share in the U.S.

By 2014, 3.8 million washers were imported to the United States from China, said the DoC.

LG Electronics had 11.5 percent market share in the residential washing machine market in the U.S. as of the first quarter of this year, followed by Samsung Electronics with 11 percent. Whirlpool is the sector leader with a 22.7 percent share over the same period, according to the data from market research firm Euromonitor.

The DoC will make its final ruling on the issue in December. The USITC will decide whether such practices by LG and Samsung have a “real impact” on the American market.

“There are chances that the anti-dumping duty will be lowered. But the rate ruled by the DoC in its preliminary ruling was very high. I believe this was partly due to deepening conflicts in trade between China and the United States,” Jeh Hyun-jeong, a senior researcher at the Korea International Trade Association’s international trade bureau, said.

In 2013, the U.S. government also ruled that Samsung and LG Electronics were dumping large residential washers exported to the United States from their facilities in Korea and Mexico.

Following that ruling, the Korean electronics duo moved their washer production for the United States to China.

But the World Trade Organization (WTO) said the 2013 decision by the U.S. government on LG and Samsung was against WTO agreements.