The South Korean government vowed Wednesday to work with Samsung Electronics Co. and LG Electronics Inc. to defend washers made by the two companies in the U.S. market, where they could be subject to tough safeguard measures. (Image: Yonhap)
SEOUL, Oct. 11 (Korea Bizwire) — The South Korean government vowed Wednesday to work with Samsung Electronics Co. and LG Electronics Inc. to defend washers made by the two companies in the U.S. market, where they could be subject to tough safeguard measures.
The trade and foreign ministries held a meeting with the tech giants to discuss countermeasures that can be taken after the U.S. International Trade Commission (ITC), concluded last week that rising imports of washing machines were harming domestic producers. The four-month probe was prompted by a safeguard petition filed by their American rival Whirlpool Corporation and could lead to a rise in import duties or quotas.
The meeting focused on how to tackle the ITC decision and remedies, which will be discussed at a public hearing in Washington on Oct. 19.
“We are in agreement that the import restrictions on Korean washers would limit American consumers’ choice and raise product prices,” the trade ministry said in a release. “We will also highlight local companies’ decision to invest in U.S. factories that can create more jobs there.”
The panel plans to recommend remedies to U.S. President Donald Trump by Dec. 4. The president will make a final decision on the issue early next year.
Samsung and LG are estimated to sell about 2 million washing machines in the U.S. every year, accounting for 35 percent of market share. This is roughly on par with Whirlpool, with a combined sales value estimated at US$1 billion, industry watchers said.
Samsung produces most of the washers in Thailand and Vietnam. LG also makes around 80 percent of its machines in Thailand and Vietnam, while the remaining 20 percent is produced in South Korea.
Although the ITC’s measure is expected to exclude volumes produced in South Korea, the decision is anticipated to weigh down on Samsung and LG’s sales, as they still depend heavily on overseas production facilities.
Considering Trump’s “America First” policy in trade, the companies agreed to emphasize their investment in new appliance factories in the U.S.
Samsung’s home appliances factory under construction in South Carolina is expected to be ready for operation in January. LG Electronics’ construction of a washer factory in Tennessee should be completed in the first quarter of 2019.
The government also plans to make its stance clear during the World Trade Organization’s Committee on Safeguards, slated for Oct. 23, through various diplomatic channels, and contact the governments of Thailand and Vietnam to discuss the potential impact on their export and job market in case strong restrictions are adopted by the United States.
(Yonhap)
