Politicians Split on Whether Washer Safeguards May Hurt Industry

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By Brian Flood

Potential trade restrictions on washing machine imports are drawing a huge reaction from members of Congress, governors, and local officials, who are sharply divided over whether such measures would help or hurt the U.S. appliance manufacturing industry.

Politicians from regions with Whirlpool Corp. or GE Appliances facilities are urging President Trump to impose duties of up to 50 percent on imports of large residential washers, as well as limits on the number of parts for such machines that can be imported. Lawmakers representing regions with Samsumg or LG Electronics facilities, on the other hand, argue that these measures would actually do more harm than good to the U.S. appliance manufacturing industry.

The International Trade Commission on Nov. 21 recommended a tariff-rate quota on the imported washers. After the first 1.2 million units enter the U.S., additional entries would face a tariff of 50 percent in the first year, easing down to 45 percent in the second year, and 40 percent in the third.

Ultimately,however, the president will decide whether to impose restrictions and how severe they will be.

Lots of Attention

Sens. Rob Portman (R-Ohio) and Sherrod Brown (D-Ohio) sent a letter to President Trump Jan. 3 “to provide an Ohio viewpoint in the case,” saying Whirlpool’s manufacturing facility in Clyde, Ohio is threatened by unfairly traded imports. The senators warned that the ITC’s recommended remedies are insufficient to meaningfully protect the domestic industry and the thousands of workers it employs.

But at a hearing of the interagency Trade Policy Staff Committee in Washington, officials from South Carolina and Tennessee stuck up for Samsung and LG.

Rep. Ralph Norman (R-S.C.) said Samsung, which recently announced it would open a manufacturing facility in Newberry, S.C., should be considered part of the domestic industry and have its interests taken into account. The company’s U.S. production will take a while to ramp up, Norman said, meaning that for 12 to 18 months it must continue to rely on imports to meet demand. Heavy tariffs during that period would hurt the company’s ability to stay competitive in the U.S., and, would be counterproductive and would hurt the people of South Carolina in the long run.

Gov. Henry McMaster (R-S.C.) also spoke in defense of Samsung, saying he supports Trump’s “America First” trade policy, but that the proposed safeguards would hurt, not help, U.S. manufacturing. Similarly, Jim Durrett, mayor of Montgomery County, Tenn., where LG Electronics is building its own appliance manufacturing plant, said the U.S. should not use its trade laws to interfere with “healthy competition.”

Heesang Kim, deputy director-general at South Korea’s Ministry of Foreign Affairs, told the committee that if the U.S. imposes safeguard measures that are too broad to comply with its World Trade Organization obligations, it will lead other countries to abuse such measures as well. He said that could impact U.S. exports. He urged the Trump administration to exempt South Korea from any safeguards it does impose.

To contact the reporter on this story: Brian Flood in Washington at bflood@bloomberglaw.comTo contact the editor on this story: Jerome Ashton at jashton@bloomberglaw.com

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