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U.S. officials suggest tariffs on imported residential washers

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U.S. officials suggest tariffs on imported residential washers

Imports of large residential washing machines, including those produced outside the U.S. by Samsung Electronics and LG Electronics Inc., could be subject to new tariffs under a new structure unveiled Nov. 21 by the U.S. International Trade Commission.

The ruling stems from a safeguard petition that Benton Harbor, Mich.-based Whirlpool Corp. filed with the ITC in May. That petition alleged that LG and Samsung were flooding the U.S. market with washing machines, causing "serious injury" to U.S. manufacturers, including Whirlpool.

In a statement, the ITC recommended a graduated tariff structure if imported washing machines reach a total of more than 1.2 million in the next three years. If imports exceed that level, the U.S. would impose a tariff of 50% on additional machines in the first year and lower it to 40% by the third year, according to the ITC's statement.

The commission also approved a similar stepped structure for imports of washing machine parts, though the ITC did agree to increase the number of units that companies could import tariff-free from 50,000 in the first year to 90,000 in the third year.

President Donald Trump now has to decide whether to implement the tariffs, the commission said in its statement. It was not clear whether the tariffs, if imposed, would apply to other foreign manufacturers importing the washers to the U.S. or only to Samsung and LG.

A spokesperson for the ITC did not immediately return a request for comment.

In a statement, Samsung commended the ITC for not recommending higher tariffs originally proposed by Whirlpool. But the company said it believes that "no remedy is necessary," citing a factory it is building in South Carolina that is scheduled to begin producing washing machines in early 2018.

"We strongly urge the [Trump] Administration not to impose any remedy that would harm the workers in our South Carolina factory, or limit them from delivering innovative washing machines, made by Americans and for Americans," Samsung said in its statement.

LG also pointed to a factory it is building in the U.S., adding that the Clarksville, Tenn., plant project has won praise from Trump Administration officials.

Imposing the tariffs "will only hurt consumers by raising prices and deceasing choices, while jeopardizing U.S. investment, innovation and job growth," LG wrote.

Whirlpool did not immediately respond to a request for comment. Last month, Whirlpool lauded the ITC for ruling Oct. 5 that "large residential washers are being imported into the United States in such increased quantities as to be a substantial cause of serious injury" to domestic producers.

In its original petition, Whirlpool sought a remedy under Section 201 of the Trade Act of 1974, which allows companies to lobby for "global safeguard" restrictions in order to protect markets where they operate. Whirlpool also pointed to prior government findings from 2013 that the companies had illegally dumped South Korean and Mexican washers in the U.S. market.

The ITC began its investigation in June after Whirlpool filed its complaint with the commission.