Two international businesses have been punished for “dumping” products unfairly in the United States, which harmed Whirlpool (NYSE:WHR) directly, and workers in Ohio directly. The US International Trade Commission issued a ruling saying that LG and Samsung Electronics, both of South Korea, sold their washing machines in the United States at a price that was less than their making cost. These washing machines were all manufactured in China and imported back into the US.
Whirlpool had filed a complaint earlier with the commission that looks after overseas trade issues. In the last four years, this is the second time Whirlpool Corporation, which is headquartered in Michigan, has come out on the winning side against these two competitor businesses.
The Case Against LG and Samsung
Back then, the federal government had accused LG and Samsung Electronics (KRX:005930) of manufacturing large residential clothes washers in Mexico and South Korea, and dumping them in the US. Authorities imposed duties on them both. LG and Samsung then went to China to make the washers to circumvent the ruling.
It now seems like, the same thing is happening again.
Fettig informed the commission that Whirlpool has canceled plans of investing in the Clyde plant that would have created 1300 jobs because of this dumping. Thousands more could have been employed across the country. He said, “Whirlpool’s washer business was very profitable before Samsung and LG began dumping in the United States. We have suffered significant losses. We’ve suffered a negative return on all of our prior investment”.
Senators also urged the commission to rule in favour of Whirlpool.
Duties to be Imposed on the Washing Machines of LG and Samsung
After this ruling by the US International Trade Commission, taxes or duties will now be imposed on the washers that are imported to the country from China. The tax would be 32.1 percent for LG, and an even bigger 52.5 percent for Samsung Electronics.
The CEO and Chairman of Whirlpool, Jeff Fettig, was naturally happy after the verdict. Jeff issued a statement saying, “This is a gratifying win for American manufacturing, particularly our more than 3,000 employees at our factory in Clyde, Ohio, who make clothes washers for American consumers”.
Whirlpool (NYSE:WHR) makes washers in their plant in the US state of Ohio, at Clyde. There is another plant in Marion. Most of the washers from the Clyde factory are sold in the United States. However, around 10 percent of them are exported.