Panel finds U.S. washing machine makers hurt by LG, Samsung imports

Source: By David Lawder, Reuters • Posted: Tuesday, October 10, 2017

WASHINGTON (Reuters) – The U.S. International Trade Commission found on Thursday that surging imports of large residential washing machines harmed domestic producers, a major step toward the imposition of broad duties or quotas on foreign-made Samsung- and LG-brand machines.

The case, brought by U.S. appliance giant Whirlpool Corp (WHR.N), sought “global safeguard” restrictions to stop South Korean rivals Samsung Electronics Co Ltd (005930.KS) and LG Electronics Inc (066570.KS) from flooding the U.S. market with cheaper washers.

The commission, voting 4-0 in favor of a finding that the large number of imports was hurting domestic manufacturers, will recommend remedies by Dec. 4 to President Donald Trump, who is expected to make a final decision by early next year.

A public hearing on possible remedies has been scheduled for Oct. 19, an ITC spokeswoman said.

The panel did not find that washers made specifically in South Korea, already subject to anti-dumping duties, were responsible for harming U.S. manufacturers.

Whirlpool Chairman Jeff Fettig said the decision was another vindication in the company’s years-long anti-dumping battle with Samsung and LG, in which he had accused them of moving production around the world in order to avoid U.S. duties.

“This type of corrective action will create U.S. manufacturing jobs,” Fettig said.

Washing machine parts move along a conveyor belt waiting to be assembled at a Whirlpool plant in Clyde, Ohio, U.S. October 3, 2017. REUTERS/Aaron Josefczyk

Samsung and LG both issued statements saying that import curbs would hurt consumers by raising prices, limiting choice and stifling innovation.

They emphasized their own investments worth hundreds of millions of dollars in new appliance factories in the United States, both announced since Trump took office in January.

LG accused Whirlpool of using U.S. trade laws to restrain an innovative competitor.

“Soon, competition in the washer market will not be about domestic vs. foreign production,” LG said its statement. “It will be about competition among washers made in the United States, in Ohio, Kentucky, Tennessee and South Carolina.”

The washer case represents a dilemma for Trump and his “America First” trade agenda, potentially putting him in the position of punishing companies that have pledged investments to bring manufacturing jobs to the United States.

The ITC’s decision is the second in two weeks that the panel has found injury in a “global safeguard” case, after ruling that cheap solar panel imports from China and other countries were hurting domestic producers SolarWorld America (SWVKk.F) and Suniva Inc, majority-owned by China’s Shunfeng International Clean Energy Ltd (1165.HK).

The washer and solar cases were filed under Section 201 of the Trade Act of 1974, a statute that hasn’t been invoked since 2002, when George W. Bush imposed broad temporary tariffs on steel imports.

The steel duties were withdrawn 21 months later after the World Trade Organization found the action a violation of U.S. tariff-rate commitments.

Editing by Tom Brown and Bernadette Baum