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THE INVESTOR

Retail & Consumer

US safeguard likely to hurt Samsung, LG washer sales

  • PUBLISHED :October 09, 2017 - 11:06
  • UPDATED :October 09, 2017 - 11:17
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[THE INVESTOR] The US International Trade Commission’s latest ruling in favor of Whirlpool to impose safeguard restrictions on Samsung Electronics and LG Electronics will deal a blow to the Korean tech giants, who together sell $1 billion worth of washing machines each year in the US.

Whirlpool filed a petition with the ITC in May, seeking restrictions to stop Korean firms from flooding the US market with cheaper washers. A safeguard law is a restraint on international trade to protect home industries from foreign competition.

Samsung and LG’s combined shares of their washing machines in the US rose to 31 percent in the first half of this year from 23 percent in 2014 while Whirlpool’s share dropped to 37 percent from 41 percent during the same period, according to the US market research company, TraQline. The two Korean firms are estimated to have shipped $1 billion worth of washing machines to the US last year.

The ITC ruled in favor of Whirlpool on Oct. 5, saying that a surge of washing machines from Samsung and LG had hurt domestic manufacturers. The public hearing on possible remedies with respect to the safeguard is scheduled for Oct. 19.

When the safeguard restrictions are invoked, the US government may impose or increase tariffs on Korean firms and limit their imports to the US. 



Related: 
US trade commission finds Korean washers hurt domestic industry
Samsung, LG express disappointment in US ITC's remark on washers

Samsung and LG’s washing machines made in Korea will be excluded from the restrictions under the rules of the Korea-US Free Trade Agreement. But the Korean firms will not benefit much from this rule, as most of their washing machines shipped to the US are made in overseas factories in Vietnam, Mexico and elsewhere.

In the face of the hearing, Samsung and LG are to meet on Oct. 11 together with foreign and trade ministries to discuss how to minimize the potential damages. The tech firms are to join the hearing to appeal to the US government.

During the hearing, Samsung and LG will reportedly highlight there is no ground that Whirlpool was damaged because of the Korean firms and the restrictions will only lead to losses for the US consumers.

On the day when the ITC ruled in favor of Whirlpool, Samsung said, “Restrictions on imports of Samsung washing machines will negatively affect American consumers by limiting choices, raising prices, and offering less innovative washing machines,” on its US company website.

LG’s spokesperson said the same day, “LG washing machines have grown on the back of the US distributors and consumers. We will actively explain during the hearing that Whirlpool was not damaged and the safeguard restrictions will eventually lead to damages for US consumers.”

By Shin Ji-hye (shinjh@heraldcorp.com)/The Korea Herald
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