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THE INVESTOR
August 08, 2022

Samsung

Korea to approach WTO against washer tariffs in US

  • PUBLISHED :November 23, 2017 - 15:41
  • UPDATED :November 23, 2017 - 15:41
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[THE INVESTOR] Korea has decided to approach the World Trade Organization if the US decides to implement recommendations of the International Trade Commission to impose heavy tariffs on washing machines produced by Samsung Electronics and LG Electronics, the Ministry of Trade, Industry and Energy said on Nov. 23.

The decision comes a day after the ITC issued a guidance on safeguard measures, following a meeting with officials from Foreign Affairs Ministry, Samsung and LG to discuss response measures, it noted.




“The ministry regrets the decision and we will oppose the proposed safeguard measures,” said Kang Sung-chun, deputy minister of the MOTIE, after the meeting, adding it is unfair to impose tariffs on sales of washers below 1.2 million units.

The ministry intends to file a dispute settlement complaint at the WTO jointly with other affected countries, including Vietnam and Thailand where Samsung and LG run manufacturing factories, if the Trump administration ratifies the safeguard measures. President Donald Trump is expected to sign off on the ITC recommendations early next year.

The four-member ITC panel recommended a tariff rate of 50 percent on imported washers above a 1.2 million-unit threshold over the next three years. The rate will drop by 5 percent each year to 40 percent in the third year. The ITC commissioners were split on whether tariffs need to be imposed on imports of washers lower than 1.2 million units with two members suggesting a 20 percent tax rate and two others recommending zero tax. Under the recommended measures, imported components exceeding 50,000 units will also be slapped with a 50 percent tax rate.

The ITC’s recommendations come after US electronics behemoth Whirlpool in May requested it to levy 50 percent tariff on all imported washing machines, specifically accusing Samsung and LG of dumping their products.

The combined annual exports of washers made by the Korea electronics firms exceed 2 million and at least 800,000 will be subject to the measures.

Samsung and LG, which are building washing machine factories in South Carolina and Tennessee, respectively, insisted the increased taxes will lead to limited consumer choice and affect job creation in the two states.

“Any type of tariffs will consequently undermine, to some extent, the competitiveness of Samsung and LG in the US market,” a market watcher forecast.

By Kim Young-won (wone0102@heraldcorp.com)

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