A preliminary investigation by the U.S. International Trade Commission (ITC) has found that certain large residential washers imported from Korea and Mexico are harming the U.S. appliance industry by being sold at below-market prices.
The preliminary vote, taken earlier this month, stemmed from anti-dumping and countervailing duty petitions filed with the U.S. ITC and the U.S. Department of Commerce (DOC) in December by Whirlpool, accusing LG and Samsung of predatory pricing.
Whirlpool also filed similar petitions against LG, Samsung and Electrolux over bottom-mount refrigerators last March, citing “substantial unfair subsidies given by the Korean government to Samsung and LG in the past few years.” The DOC confirmed in a preliminary determination in October that the products were sold in the U.S. at below-market prices.
The DOC defines dumping as the sale of products at a price below the home-market or a third-country price, or below the cost of production. Both investigations could lead to the imposition of “anti-dumping duties,” or trade tariffs, which would effectively increase the cost of the imported products to dealers and consumers.
“Whirlpool is pleased with the ITC’s preliminary affirmative injury determination,” a company spokesperson said. “This decision by the ITC validates the actions we’ve taken to protect the U.S. domestic appliance industry, our 23,000 U.S. employees, and the communities in which they work.”
LG said it disagrees with today’s preliminary vote by the ITC and promised to “aggressively contest the injury- related issues in the final determination phase of the case.”
In a statement, Chris Jung, president of LG Electronics USA’s home appliances division, said the company “looks forward to the opportunity to show why imports from LG … have in no manner injured Whirlpool. We are confident that LG will prevail in the final ITC determination.”
A Samsung spokesperson said the company is disappointed with the ITC’s preliminary determination and disagrees that there is any material injury to the U.S. washer industry, as evidenced by Whirlpool’s strong fourth-quarter earnings and its continued market share dominance.
Samsung argued that U.S. consumers have been willing to pay a premium for its products and that Whirlpool’s actions “will ultimately reduce choice and value for the American consumer.”
“We are confident that once the full investigation is concluded, it will be determined that Samsung is in compliance with U.S. trade laws,” the spokesperson said.
The investigations are expected to run through February 2013. In its procedure, the DOC would first announce preliminary antidumping duties and then follow with final duties. If the ruling is maintained at that time, and the U.S. ITC also finds evidence of damage to a U.S. manufacturer, the anti-dumping penalties will be finalized.
The U.S. ITC is an independent, quasi-judicial federal agency with broad investigative responsibilities on matters of trade, including the effects of dumped and subsidized imports on domestic industries.