The US Commerce Department have set preliminary duties of up to 71% on domestic washing machines from South Korea in the latest trade action brought by US manufacturer Whirlpool.
The US department estimated Daewoo Electronics had received subsidies equal to a whopping 70.58% of the cost of production, compared to its findings of only 0.22% for LG Electronics and 1.2% for Samsung Electronics.
The high duty for Daewoo was based on “adverse facts” supplied by Whirlpool because Daewoo declined to participate in the investigation.
Importers will have to post bonds or cash deposits based on the preliminary rates while the Commerce Department continues its investigation. The United States imported an estimated $568 million of the washers from South Korea in 2011. In effect, it looks as if both Daewoo and Samsunng will have to make payment to US Customs & Border Protection based on the level of subsidy that has been determined by the Commerce Department.
“Whirlpool Corporation is pleased with this favorable preliminary decision, given the proven record that South Korean appliance producers have benefited from their government’s subsidies that violate trade law,” Whirlpool spokesperson Kristine Vernier said in a statement. “We are optimistic that the final determination will further validate that these subsidies undermine competition and cause material harm to the U.S. appliance industry,” she added.
LG said in a statement that, “LG Electronics respects the rules of international trade, and the company is gratified with the Commerce Department’s preliminary determination in the investigation of Large Residential Washers.’’
Samsung commented in a statement that, “Samsung respects the trade rules in the U.S. market, and is confident that once the full investigation is concluded, the U.S. Department of Commerce will confirm that Samsung is in compliance with U.S. trade laws. We will continue to meet the demand from U.S. consumers for our superior washing machines.’’
US federal regulators will now try to ascertain if the imports threaten the domestic appliance industry in the USA.
The Commerce Department is expected to make a final determination in August.
The U.S. International Trade Commission already made its preliminary decision in favor of U.S. manufacturers in February and is expected to reach its final conclusions in September.