Majap Makers Facing Stiff Tariffs

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Washington - Offshore majap makers are facing possible double-digit import duties on bottom-mount refrigerators following yesterday's determination by the U.S. Department of Commerce (DOC) that the products were sold in the U.S. at below-market prices.

The year-long investigation was

triggered by Whirlpool

, which filed anti-dumping and countervailing duty petitions last March against Electrolux, LG Electronics, Samsung and Mabe, a Mexican OEM that produces appliances for GE.

Among other claims, Whirlpool had cited "substantial unfair subsidies given by the Korean government to Samsung and LG in the past few years," although the DOC dropped its countervailing duty claim against LG yesterday after finding that the company's refrigerators are not illegally subsidized.

The case now goes before the U.S. International Trade Commission (ITC), an independent, quasi-judicial federal agency, which will make a final determination in April. If the ITC supports the DOC's determination, duty deposits could be required from the four vendors as early as May.

Based on the DOC's dumping margin findings, the import duties may be as high as:

  • 30.34 percent for LG's Mexican-assembled fridges and 15.41 percent for those made in Korea;
  • 15.95 percent for Samsung's Mexican-assembled fridges and 5.16 percent for those made in Korea;
  • 22.94 percent for Electrolux's Mexican-assembled fridges; and
  • 6 percent for Mabe-made products.

In a separate case related to bottom-mount refrigerators from South Korea, the DOC found dumping margins of 12.9 percent for exports by Daewoo and 2.46 percent for exports by Samsung.

In response to the ruling, LG and Samsung claimed the DOC used a discredited comparison methodology called "zeroing" that inflated the margin data.

LG also claimed that the DOC erroneously compared U.S. prices of Mexican refrigerators to the prices in Korea for a highly specialized line of Korean refrigerators designed primarily to store kimchi, a Korean food specialty, which highly inflated the antidumping duty margin for its Mexican-made fridges.

Chris Jung, president of Home Appliances for LG Electronics USA, promised to "continue to aggressively contest the antidumping duty findings through every means possible in order to obtain determinations that fully and accurately reflect [LG's] pricing in the U.S. market."

Samsung said it is "disappointed" with the DOC's determination, which it claims is based on "flawed methodologies.

"The use of zeroing created an antidumping margin where dumping did not occur," the company said.  "We are disappointed that the Commerce Department continues to use this discredited methodology," which has been found in several instances to violate World Trade Organization standards upon which the antidumping duty laws are based.

 "Although Samsung will do everything we can to mitigate any impact of this decision on our business and customers, American consumers stand to lose the most from today's determination," Samsung said.

The company also reiterated its "long-term commitment" to its U.S. majap business.

Neither Electrolux nor GE Appliances responded to TWICE's request for comment by post time.

For its part, Whirlpool said it "remains confident that the successful conclusion of these investigations will lead to trade remedies against unlawfully traded bottom-mount refrigerators from South Korea and Mexico."

Added Whirlpool North America president Marc Bitzer: "We are pleased with the Department of Commerce's decisions."

In a

separate investigation

, the U.S. ITC said last month that it found preliminary evidence of predatory pricing on certain large-capacity washers imported from Korea and Mexico by LG and Samsung. The investigation is expected to run through next February.


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