WASHINGTON (Reuters) – Appliance giant Whirlpool Corp (WHR.N) on Thursday called on the U.S. International Trade Commission to impose “global safeguard” restrictions on imported washing machines to stop its South Korean rivals Samsung and LG from flooding the American market with cheap machines.
Testifying to the trade body, Whirlpool Chief Executive Officer Jeff Fettig accused Samsung Electronics Co Ltd (005930.KS) and LG Electronics Inc (066570.KS) of moving operations around the world to avoid paying U.S. duties.
His concerns were echoed by an executive of GE Appliances, which also makes products in the United States. But executives of the Asian manufacturers argued that they also employ American workers at U.S. factories.
“Without safeguard relief, it is hard to see how we maintain our competitiveness in the face of a continued onslaught of low-priced imports,” Fettig said.
He said the companies had moved major manufacturing operations to five different countries to avoid anti-dumping duties being imposed by the United States on their washing machines.
“A global safeguard is absolutely critical because it is the only tool available under U.S. trade law that can remedy the impact of Samsung and LG’s evasive ‘country hopping’ behavior,” he added.
The ITC in January found that Whirlpool and other U.S. producers were injured by dumped imports of large residential washing machines from China. The 6-0 decision locked in place for five years final duties on the products of as much as 52.5 percent.
Appealing to President Donald Trump’s “America First” agenda, Fettig warned that American jobs were at stake without action to halt the low-cost imports.
While Whirlpool has pursued anti-dumping cases for years against its South Korean rivals, it did not seek broader relief under Section 201 of the Trade Act of 1974 until Trump’s commerce secretary, Wilbur Ross, took office with a mandate for much tougher trade enforcement.
Two U.S. solar panel makers, SolarWorld America (SWVKk.F) and Suniva Inc, majority-owned by Chinese solar manufacturer Shunfeng International Clean Energy Ltd (1165.HK), are seeking similar relief from imports in the first Section 201 case filed in more than a decade.
The ITC will vote next month on whether the washer imports cause harm U.S. producers. If it makes such a finding, it would recommend remedies by late November to Trump, who would make a final decision by early 2018.
CONSUMER BRAND APPEAL
Samsung Electronics North America’s chief executive, Tim Baxter, rejected Whirlpool’s claims that his company’s washers were harming the U.S. appliance industry.
“We categorically reject Whirlpool’s assertions,” Baxter said in testimony to the ITC. “We have invested, we have competed fairly and the consumers continue to vote with their wallet.”
John Herrington, Samsung Electronics North America senior vice president and general manager, said Whirlpool’s market share exceeded 70 percent when it acquired Maytag and failed to embrace changes in the market.
“We have not harmed Whirlpool,” he told the ITC panel. “Rather, we recognized and anticipated the changing market and drove new trends.”
Samsung said in June it would invest $380 million in a home appliance manufacturing plant in Newberry, South Carolina, which would generate 954 jobs by 2020.
John Riddle, senior vice president of U.S. Home Appliances at LG, said LG grew its U.S. market because it had a strong brand customers supported, and because new retailers decided to carry its products.
Peter Pepe, vice president of clothes care at General Electric Co’s appliance business, which was bought by China’s Haier Group (1169.HK) in June 2016, said “uneconomic pricing pressure” from increased imports of washers had hurt the U.S. industry over the last five to seven years.
“We know we can compete because we have for a century. Think about that: 100 years versus the most recent five to seven,” Pepe told the ITC. “Just because uneconomic practices by new competitors are seriously injuring us is not a reason to give up on our brand. It is a reason to fight. And that is why we are here today.”
Additional reporting by David Lawder; Editing by Leslie Adler and David Gregorio