Whirlpool Corporation – parent of its namesake brand as well as Maytag, Amana and several others, won a major victory against foreign imports of appliances in a federal trade complaint, which may or may not have a big impact US trade policies going forward.
Whirlpool's targets are two South Korean firms, Samsung and LG, which in recent years have grown to become global giants in the appliance business – and taking US share away from Whirlpool with imported products.
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| One expert says the Trump administration's tough stance on trade "is emboldening companies" to bring similar trade actions as that successfully pursued by Whirlpool. |
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In an earlier case, Whirlpool was able to get the US federal government to rule that Samsung and LG were dumping washing machines made in Korea and Mexico into the United States at below fair-market prices, making then subject to country-specific import tariffs. But the victory was a temporary one: LG and Samsung avoided those tariffs by switching production to China and later to Vietnam and Thailand.
Perhaps emboldened by an incoming Trump administration and the president's tough campaign talk on trade, earlier this year Whirlpool filed a new action with the US International Trade Commission under the seldom used "global safeguard" complaint, which doesn't require that Whirlpool show it was hurt by some type of unfair competition. Instead, the requirement was that Whirpool simply show that a surge of imports have seriously damaged it. These safeguards are generally meant to provide temporary relief for the domestic industry to adjust.
As largely expected, the ITC ruled last week in Whirlpool's favor. The 4-to-0 vote by the commission means that the over the next two months, the commission will consider specific protectionist measures such as duties and tariffs to recommend for President Trump's approval.
Could Whirlpool's victory kick-off a trend that sees other US manufacturers seek similar general trade relief? And iIn the Whirlpool case and potentially others, what will be the trade response, either from impacted countries and/or likely almost certain actions against any such US protectionism at the World Trade Organization.
It is worth noting that the ITC also ruled in September that solar panels were being imported in such quantities as to cause serious harm to domestic panel makers, and it will now determine what duties/tariffs to levy against imports.
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But the answer and consequences aren't always as clear as they might seem at first glance. In one of the last successful “global safeguard” actions taken in 2002, the Bush administration agreed with the US steel industry and imposed steep tariffs on imported steel. Good maybe for domestic steel producers, but by some estimates nearly 200,000 workers in steel-consuming industries lost their jobs as a result. Before long, the tariffs on imported steel were lifted.
 The similar ruling on imported solar panels has led some to estimate that restricting imports could threaten tens of thousands of jobs for installers of solar panels and related workers in the US.
And Whirlpool, which operates the highest volume appliance factory in the world near Findlay, OH, where it has brought back some production from Mexico and Germany, may find another avenue of competition from Samsung and LG: both companies say they are preparing to invest hundreds of millions of dollars to open appliance manufacturing facilities on American soil. LG already has broken ground on a 310-acre site in Clarksville, Tenn., and Samsung has acquired an existing facility in Newberry, SC, though some are saying the trade action could somehow scuttle one of both of those plans.
Though at those factories, the South Korean companies would obviously need to pay competitive US wages, far higher than in say Vietnam.
So where do we go from here? The Los Angeles Times last week quoted noted trade attorney Stephen Orava of King & Spalding as saying the Trump administration's tough stance on trade "is emboldening companies" to bring similar trade actions as that successfully pursued by Whirlpool.
What do you think of the Whirlpool trade rulng? Do you expect more of these actions? Is that good or bad? Let us know your thoughts at the Feedback section below.
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