- Created: Tuesday, 29 December 2015 15:13
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The Wall Street Journal (WSJ) reports that Whirlpool is asking the U.S. government to impose duties on washing machines made by Korean rivals Samsung Electronics Co. and LG Electronics Inc. in China.
In a petition filed with the government Whirlpool alleges that the Korean companies have grabbed a bigger share of the U.S. market by selling washers at less than they cost to produce.
The petition from Whirlpool comes less than three years after the U.S. Commerce Department imposed duties of about 9% to 13% on washers made by those companies in Mexico and South Korea for export to the U.S. Whirlpool says LG and Samsung responded to those duties by shifting production to China, circumventing the duties.
A Samsung spokeswoman told the WSJ the company was confident U.S. authorities would find it hadn’t violated trade rules. An LG spokesman predicted the investigation would “show that LG’s washers have not been sold unfairly in the U.S. market and have not been causing any injury to the U.S. industry.”
Whirlpool’s petition covers full-size top-load and front-load washers, along with certain washer parts, made by the Korean companies in China. Many of those washers retail for between $500 (£340) and $1,000 (£680) in the USA.
Using estimates of production costs, the Commerce Department will have to rule on whether the Korean companies are dumping these products, or selling them at unfairly low prices. Another U.S. agency, the International Trade Commission, would determine whether the pricing practices are injuring Whirlpool and other U.S. manufacturers.
Whirlpool estimated in its petition that the washers made by LG and Samsung in China accounted for 31% of the U.S. market in this year’s first nine months, up from 6% in 2012.
“Samsung and LG replaced their dumped washers from Korea and Mexico with dumped washers from China,” Whirlpool said. The company expects the Commerce Department to make a preliminary ruling by July.
The Korean companies, offering sleek designs and sophisticated control panels, have gained share in both kitchen and laundry appliances. Samsung’s share of the U.S. market for major appliances in dollar terms surged to nearly 13% in the year ended June 30 from 0.7% in 2006, according to estimates from Stevenson Co.’s TraQline service. In the same period, LG’s estimated share jumped to 13% from 3.4%.
Whirlpool said it has 15,000 manufacturing workers at nine plants in the U.S. The company said its plant in Clyde, Ohio, is the world’s biggest manufacturing location for washers.
In a previosu separate case we reported a few years ago, the U.S. International Trade Commission in 2012 rejected Whirlpool’s demand for tariffs on refrigerators made by Samsung and LG. The Korean companies denied the allegation.