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‘Restrictions on Korean washers are unfair,’ U.S. governors say

‘Restrictions on Korean washers are unfair,’ U.S. governors say

Posted October. 21, 2017 07:46,   

Updated October. 21, 2017 08:05


South Korean home appliance manufacturers and government officials on Thursday strongly protested against U.S. safeguard restrictions on imported washing machines at a hearing held by the U.S. International Trade Commission (ITC). U.S. high-ranking officials, including the governors and commissioners of South Carolina and Tennessee, where Samsung Electronics Co. and LG Electronics Inc. are about to open washing machine factories, attended the hearing and argued the unfairness of the safeguard.

The hearing was held by the ITC to come up with remedies to prevent U.S. manufacturers from getting injured by imported washing machines. Attendees at the hearing included John Herrington, senior vice president of Home Appliances at Samsung, John Riddle, a senior vice president of Home Appliances at LG, and South Korean government officials from the Ministry of Trade, Industry and Energy and the Ministry of Foreign Affairs. The hearing was held after Whirlpool called for a 50 percent tariff on Samsung and LG washing machines and parts in their first year and a 48-50 percent tariff for three years from their second year.

Meanwhile, Samsung and LG stressed that their home appliance factories, which are currently under construction, will create jobs and boost local economy. "By the end of 2018, when both lines are running, we anticipate having almost 1000 employees, working two shifts,” the Samsung senior vice president said. “I can personally tell you it is going to be a state-of-the-art manufacturing facility, employing 1,000 people and eventually producing more than 1,000,000 washers a year.”

Once the safeguard takes effect, the two South Korean home appliance makers may find it difficult to normally operate their factories, which will lead to a reduction in employment and hurt the economy. "The restrictions will result in a drop in the number of stores selling our washing machines, which will consequently reduce the number of purchases by customers,” said the LG senior vice president. “A falling demand will naturally lead to a reduction in production at our factory in Tennessee. This will eventually hamper job creation." LG plans to invest 250 million dollars by the first quarter of 2019 in the factory it is building in Tennessee and generate more than 600 jobs.

South Carolina Gov. Henry McMaster and Tennessee Economic and Community Development Commissioner Bob Rolfe echoed the arguments made by the Korean home appliance makers. "If we impose high rate tariffs on Samsung, which is building its factory in New Berry County, it will seriously hurt local economy," said Gov. McMaster. "I ask you to carefully consider how your decision would affect the current and future investment plans of the companies making investment in Tennessee," the Tennessee commissioner said.

The ITC will vote on Saturday on whether imported washing machines harm U.S. companies based on the discussions at the hearing, and will report by Dec. 4 to U.S. President Donald Trump, who will have to make a final decision within 60 days after the report.

"We will state our views on U.S. safeguards against imported washing machines and solar panels before the World Trade Organization's Committee on Safeguards to be held on Monday,” said an official from the South Korean Ministry of Trade, Industry and Energy. “At the same time, we will continue strengthening cooperation with state governments of South Carolina and Tennessee, Congress officials and the Vietnamese government.”

Jae-Hee Kim jetti@donga.com