Korea protests US trade restrictions on washers

By Kang Seung-woo

The government and home appliance makers urged the U.S. government Wednesday to refrain from imposing any safeguard measures on washing machines, stressing they would bring negative effects to the U.S. economy.

Representatives of the Ministry of Trade, Industry and Energy and the Ministry of Foreign Affairs as well as Samsung Electronics and LG Electronics said this at a public hearing held by the U.S. Trade Representative (USTR) in Washington, D.C.

The hearing took place after the U.S. International Trade Commission (ITC) recommended a 50 percent tariff rate last November on residential washing machines made by Samsung and LG above a 1.2 million-unit threshold over the next three years. Whirlpool brought the case in May, alleging the Samsung and LG washers were having an adverse impact on the domestic industry.

This was the final hearing before U.S. President Donald Trump makes a decision on whether to approve it this month at the earliest. The USTR will also make a separate recommendation to the president based on the hearing.

“If the United States takes safeguard measures to protect its domestic industry in violation of World Trade Organization agreements, this will lead to a global abuse of import control measures and adversely impact U.S. exports,” said Kim Hee-sang, a Korean diplomat in charge of the issue.

He added that the ITC recommendation would constitute excessive regulation under relevant WTO articles.

“While we intend to supply the vast majority of washers for the U.S. market from Newberry, we cannot do this overnight… We will need to import some washers to supply a full range of products to our retailers and customers,” Samsung Senior Vice President John Herrington said.

Samsung is building a washer plant in Newberry, S.C. that will employ 1,000 workers and produce over 1 million washers annually from next year, according to the firm.

“If we are unable to offer our full range of products to retailers and customers during our ramp-up, we will lose floor space and sales, impacting the success of our South Carolina operation. So the ultimate impact of any tariffs would be a lose-lose scenario for U.S. production, U.S. employment, and U.S. consumers.”

LG also said no import restrictions were needed because its factory under construction near Clarksville, Tenn. as well as Samsung’s will drop washer imports to the North American market from 30 percent to 4 percent, if completed.

“LG reaffirmed its commitment to create American jobs even in the face of the ITC’s recommended 1.2 million unit import quota. At the same time, Whirlpool’s efforts to go beyond the ITC’s recommendations are merely an attempt to unfairly use trade laws to create a competitive advantage,” the company said in a statement.

“LG urges the administration to reject Whirlpool’s self-serving proposal, which will be harmful to Tennessee, jeopardize U.S. jobs and hurt the U.S. economy.”

South Carolina Governor Henry McMaster, Congressman Ralph Norman and Clarksville Mayor Kim McMillan also attended the hearing in support of Samsung and LG, saying trade restrictions will discourage domestic manufacturing in America.

While in close cooperation with Samsung and LG, the government also plans to reach out to U.S. officials who influence economic policies.

Samsung holds a 17.1 percent market share and LG holds 13.5 percent in the U.S. as they are estimated to sell about 2 million washing machines every year. Whirlpool holds a 38 percent share.