Samsung and LG Battling for Right to U.S. Market

In a statement released by Samsung on Oct. 19, the company wrote: “Whirlpool is trying to abuse U.S. trade laws to decrease competition and increase their profits, at the expense of consumers and retailers. If enacted, virtually all washer imports to the U.S. will cease. We hope the ITC will see Whirlpool’s proposal for what it really is – a way to protect their bottom line and their shareholders by excluding competition – and we look forward to presenting our arguments before the ITC.”

Whirlpool has asked the commission to not only issue quotas for washer imports, but to impose a tariff of 50 percent on all imported washers in 2018, 49 percent in 2019, and 48 percent in 2020. Whirlpool claims Samsung and LG repeatedly move production to circumvent duties. In addition, Whirlpool requests a quota on “covered parts.”

“A quota — not to exceed the average quantity of imports of such parts of the last three years — is necessary to prevent Samsung and LG from establishing ‘kitting’ operations in the United States that would effectively circumvent the remedy on finished LRWs,” the submission states. “Under this scenario, Samsung and LG would merely pay the duty on these covered parts, and avoid the application of 50 percent tariffs on finished LRWs.”

Samsung said such a proposal would hurt operations in the U.S. “If the 50 percent tariff is imposed on washers’ parts, it will be impossible to import parts, and thus the U.S. plant will not be normally operated.”

South Carolina Rep. Ralph Norman expressed concern that tariff and quota action puts at risk a $385 million investment by Samsung in a manufacturing plant in the county of Newberry, S.C. The plant is expected to bring 1,000 jobs to the region that will replace 385 jobs lost when Caterpillar closed its South Carolina facility.

“Let there be no doubt, Samsung’s facility in Newberry fits your definition of domestic industry,” said Norman in testimony before the USITC.

Added Norman, “Blocking imports is serious business and should be done only in the rarest of circumstances, and only for the soundest of reasons. The circumstances surrounding this petition are neither rare nor extraordinary, and the reasons it offers for blocking imports are not sound.”

“Although I advocate fair trade, this case doesn’t seem to be the subject for safeguard restrictions. I stand here to oppose the trade restriction on Samsung in any kind,” South Carolina Gov. Henry McMaster said at the USITC hearing.

A new $250 million LG manufacturing facility in Tennessee would face a similar threat to jobs and production should LG washer imports be stopped before production can begin in 2019.

Whirlpool’s proposal has been supported by lawmakers in Ohio and Michigan. A letter from eight lawmakers in Michigan was submitted to the commission this week. “After many years of skirting U.S. regulations, the commission is well aware of Samsung and LG’s unlawful dumping of large residential washers and the lengths to which these companies have gone to undermine domestic competitors,” said the Congress members. “The remedy being requested by Whirlpool Corp. and GE Appliances in this case is necessary and appropriate,” they added.

Combined market share in the U.S. for Samsung and LG was about 31 percent in the first half of 2016, compared to Whirlpool’s 37 percent, according to U.S. market research company TraQline.

The ITC will vote on remedies Nov. 21 and present a recommendation to President Trump by Dec. 4. The president will have 60 days to review the report and issue a final decision.