Whirlpool Corp. is renewing allegations that its South Korean rivals illegally undercut prices on washing machines, setting up a trade fight that could be settled by the Trump administration.
The American appliance giant announced plans on May 31 to file a petition with the U.S. International Trade Commission against Samsung Electronics Co. and LG Electronics Inc. The so-called safeguard petition is meant to provide help to domestic manufacturers hurt by importers selling products at excessively low prices.
“This filing addresses unprecedented behavior by two serial violators of U.S. trade laws,” Whirlpool CEO Jeff Fettig said.
The long-simmering conflict has the potential to become a high-profile test for President Donald Trump. Trade and domestic manufacturing were signature issues in his campaign, and Fettig serves as a member of the president’s manufacturing council. If the trade commission decides in Whirlpool’s favor, it could recommend that Trump’s administration step in and slap tariffs on the competitors’ products.
Whirlpool’s filing would be the latest in a series of complaints companies have filed with the ITC, a federal tribunal that rules on trade disputes. Last month, Boeing Co. accused Bombardier Inc. of selling passenger jets in the U.S. at “absurdly low prices,” asking the U.S. to impose duties on the Canadian jet builder.
‘One-Way Street’
Trump has threatened to pull the U.S. out of its free-trade agreement with South Korea, calling the 2012 deal a “one-way street” that has only benefited the Asian country. The U.S. trade deficit with South Korea last year, at about $28 billion, was the eighth-largest shortfall among U.S. trading partners, according to Census Bureau data.
Whirlpool’s dispute follows cases in which the U.S. government has determined that the South Korean companies injured U.S. manufacturers by selling washing machines in the country at illegal prices, Whirlpool said.
“In light of their apparent inability to compete with leading global brands like LG in the U.S. market, Whirlpool has decided to seek government restrictions to limit consumer choices,” LG said in an emailed statement. The company said that in order for Whirlpool to succeed in its petition, it would have to prove that the imported goods are found to be a significant cause of serious injury to U.S. producers -- “a high legal standard that Whirlpool cannot meet,” LG said.
Representatives for Samsung didn’t have an immediate response to the filing.
The disagreement with the South Korean companies dates back years, with victories on both sides. In 2011, Whirlpool alleged that its overseas rivals were receiving unfair government subsidies and selling products in the U.S. at below-market values. In 2013, South Korea filed a World Trade Organization dispute challenging the U.S. Commerce Department’s calculations. It won a ruling from the WTO last year.
Lagging Behind
The situation has hampered sales at the Benton Harbor, Mich.-based company’s washer division, which has underperformed its other businesses, Fettig said.
“If not for this unlawful behavior, we believe our washer category would have thrived like the rest of our North American business,” he said.
Whirlpool previously scored a win at the ITC in January, when it granted the company’s request to place dumping duties on imports of large residential washing machines from China. The 6-0 decision paved the way for final duties on the products of as much as 52.5%.
The company posted earnings last quarter that fell short of analysts’ estimates, though in that case it blamed efforts to integrate Italy’s Indesit SpA with its European operations.
By Nick Turner and Jing Cao
