Posted December. 12, 2017 08:19,
Updated December. 12, 2017 08:59
The exports of washing machines produced by Samsung Electronics and LG Electronics to the United States will likely halve once the International Trade Commission (ITC)’s recommendation to initiate safeguards on foreign washing machines is adopted by the U.S. government, according to the analysis of the commission.
The ITC submitted a report including its recommendation to introduce safeguards to U.S. President Donald Trump on last Monday. The 238-page long report includes the background of its recommendation considering the positions of American washer manufacturer Whirlpool and its Korean competitors, Samsung Electronics and LG Electronics. Also included in the report is the possible impact of the measure on the U.S. washer industry.
The ITC stated in its report that the implementation of the recommendation will benefit American manufacturers, saying, “With the quantity of imported washing machines halved, the volume of sales, total sales and the operating profit of the U.S. washer industry will witness a considerable growth compared with 2016 while the price will rise a little.”
The safeguards measure will also contribute to the local economy since Whirlpool and General Electric (GE) with higher market shares and boosted operating profits can make larger investments and create jobs, the ITC argued. “As for Whirlpool, 1,300 jobs will be added at its huge washing machine production plant in Clyde, Ohio, and it will also increase its investment in factory facilities.” The manufacturers of raw materials and parts will also benefit when Whirlpool and GE increase their production volumes, said the commission.
Out of all washers of Samsung Electronics and LG Electronics annually exported to the United States, 1.08 million units are subject to the safeguards, and according to the report, around 540,000 units may be cut. Given that the two companies are practically the only foreign companies that export washers to the United States, Korea’s domestic businesses are likely to take a blow from the safeguards, if approved.