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Washing machines are displayed for sale at a US store
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The recommendation came in response to Whirlpool’s demand for a high tariff on foreign-made washers
Over half the washing machines sold in the US should be made at US factories with US-procured parts, the US International Trade Commission (ITC) said in a Nov. 21 recommendation for safeguards. The recommendations include imposing 50% duties on volumes exceeding 1.2 million units for large foreign-made home washers passing customs, along with 50% duties for volumes over 50,000 parts in the first year, 45% for volumes over 70,000 in the second year, and 40% for volumes over 90,000 in the third year. The ITC also recommended multiple tariff rates for 1.2 million washers subject to tariff-rate quotas (TRQs), such as “0%” and “20%.” Current tariff rates are 0% for washing machines and washing machine parts produced in South Korea for export to the US and around 1% for those produced and exported from Southeast Asian countries. The US company Whirlpool previously demanded that the ITC impose a 50% tariff on all foreign-made washers, prompting Samsung Electronics, LG Electronics, and other South Korean companies to protest about the “compromising of US consumer interests.” The companies also suggested that if duties are unavoidable, they should apply at a 50% rate only to additional units beyond 1.45 million. The 1.2 million unit TRQ amount could be seen as the ITC’s compromise between the two demands. The ITC’s recommendation is to be reported early next month to US President Donald Trump, with a final decision on whether to go ahead and the actual implementation plan to come around next February. Over 2.5 million large home washing machines were produced in South Korea and southeast Asia and exported to the US last year by Samsung Electronics and LG Electronics. If the ITC’s recommendation does go into effect, they would have to pay 50% duties on over 1.3 million of the washers they export to the US. The two companies are now hurrying to take response measures, interpreting the decision as a message that they need to locally produce at least half the finished washers they sell at US factories and procure 100% of their parts locally. South Korean companies are currently hastening their efforts to complete and open plants under construction in the US, while calling on the US government to take steps to ensure low safeguard tariff rates on washing machines. Samsung Electronics plans to move the scheduled completion of the washing machine factory it is building in South Carolina, which has a target operation date in the first quarter of 2018. LG Electronics also plans to move up the opening of the washing machine factory it is building in Tennessee to late 2018 from the first quarter of 2019. By Kim Jae-seop, staff reporter Please direct questions or comments to [english@hani.co.kr]
