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Trump Must Decide on Tariffs for Imported Washing Machines Trump Must Decide on Tariffs for Imported Washing Machines
(about 9 hours later)
WASHINGTON — President Trump will soon have to decide whether to impose the types of tariffs on imported products that he has long championed after a federal body again recommended stiff levies, this time on foreign-made washing machines.WASHINGTON — President Trump will soon have to decide whether to impose the types of tariffs on imported products that he has long championed after a federal body again recommended stiff levies, this time on foreign-made washing machines.
The United States International Trade Commission, a quasi-judicial body that rules on trade cases, unanimously recommended that the president take action to limit imports of washers, a move that could help the domestic manufacturer Whirlpool better compete with its foreign rivals Samsung and LG.The United States International Trade Commission, a quasi-judicial body that rules on trade cases, unanimously recommended that the president take action to limit imports of washers, a move that could help the domestic manufacturer Whirlpool better compete with its foreign rivals Samsung and LG.
The trade officials recommended that the United States impose what is known as a “tariff-rate quota” — a tax on imports that would go into effect after a certain number of foreign products entered the American market. In this case, they recommended that the United States impose a tariff starting at 50 percent on all washers imported after the first 1.2 million units for the next three years, with the tariff rate to decrease slightly in the next few years. Two of the four commissioners issuing the decision also recommended an additional charge.The trade officials recommended that the United States impose what is known as a “tariff-rate quota” — a tax on imports that would go into effect after a certain number of foreign products entered the American market. In this case, they recommended that the United States impose a tariff starting at 50 percent on all washers imported after the first 1.2 million units for the next three years, with the tariff rate to decrease slightly in the next few years. Two of the four commissioners issuing the decision also recommended an additional charge.
The trade body will submit its recommendations on Dec. 5 to Mr. Trump, who will have to make a final decision by February. A decision to impose tariffs could further exacerbate trade tensions with South Korea, which is home to Samsung and LG. While South Korea has typically been a strong economic and strategic partner of the United States, Mr. Trump has taken a more antagonistic approach to a foreign ally. The trade body will submit its recommendations on Dec. 5 to Mr. Trump, who will have to make a final decision by February. A decision to impose tariffs could further exacerbate trade tensions with South Korea, which is home to Samsung and LG. While South Korea has typically been a strong economic and strategic partner of the United States, particularly in dealing with North Korea, Mr. Trump has taken a more antagonistic approach to a foreign ally.
While he has tried to persuade South Korean leaders to help him limit the nuclear influence of North Korea, he has also criticized South Korea for amassing a trade deficit with the United States and opened a renegotiation of a free-trade pact between the countries. South Korean officials said they would wait to see whether the result would breach the rules of the World Trade Organization.
“We will make our best effort along with the industry to ensure that the final decision minimizes damage to Korean companies by reaching out to the U.S. administration, Congress, local governments and other officials to proactively explain our position,” said Kang Sung-cheon, the country’s deputy minister of trade.
While Mr. Trump has tried to persuade South Korean leaders to help him limit the nuclear influence of North Korea, he has also criticized South Korea for amassing a trade deficit with the United States and opened a renegotiation of a trade pact between the countries.
Mr. Trump often talked about bolstering domestic manufacturing by imposing limits, including tariffs, on foreign products. But the prospect of these tariffs has sparked a fierce backlash from companies and consumers, who say they would raise prices and limit consumer choice in the United States.Mr. Trump often talked about bolstering domestic manufacturing by imposing limits, including tariffs, on foreign products. But the prospect of these tariffs has sparked a fierce backlash from companies and consumers, who say they would raise prices and limit consumer choice in the United States.
This is the second recent trade action brought under an obscure section of trade law known as Section 201, or the “global safeguard,” which gives the president broad authority to impose tariffs or other restrictions to help protect a domestic industry.This is the second recent trade action brought under an obscure section of trade law known as Section 201, or the “global safeguard,” which gives the president broad authority to impose tariffs or other restrictions to help protect a domestic industry.
On Oct. 31, the trade commission announced that it was forwarding a similar decision on the solar power market to the president. Mr. Trump will have to decide whether to impose penalties on foreign solar products by January.On Oct. 31, the trade commission announced that it was forwarding a similar decision on the solar power market to the president. Mr. Trump will have to decide whether to impose penalties on foreign solar products by January.
Before the solar case, the law had not been used to initiate a trade action since 2001.Before the solar case, the law had not been used to initiate a trade action since 2001.
As in the solar complaint, a domestic manufacturer asked the government to consider a safeguard case after its rivals dodged previous trade actions targeted at one country by moving their operations elsewhere. Whirlpool accused Samsung and LG of “serial country-hopping” to evade American trade actions.As in the solar complaint, a domestic manufacturer asked the government to consider a safeguard case after its rivals dodged previous trade actions targeted at one country by moving their operations elsewhere. Whirlpool accused Samsung and LG of “serial country-hopping” to evade American trade actions.
Samsung and LG imported about three million washers in 2016, Whirlpool said.Samsung and LG imported about three million washers in 2016, Whirlpool said.
In a statement, Whirlpool said that it was “encouraged” by the decision and that it “remains optimistic that the administration will implement a full and appropriate remedy to ensure that Samsung and LG cannot circumvent any element of the order.”In a statement, Whirlpool said that it was “encouraged” by the decision and that it “remains optimistic that the administration will implement a full and appropriate remedy to ensure that Samsung and LG cannot circumvent any element of the order.”
“The proposed tariff is consistent with what the companies would be paying had they not evaded antidumping orders by moving production from China to Thailand and Vietnam,” Whirlpool said.“The proposed tariff is consistent with what the companies would be paying had they not evaded antidumping orders by moving production from China to Thailand and Vietnam,” Whirlpool said.
Samsung was more muted in its statement, saying that it continued “to believe that no remedy is necessary.” Samsung was more muted in its statement, saying that it continued “to believe that no remedy is necessary.” LG said in a statement that trade restrictions “will only hurt consumers by raising prices and decreasing choices, while jeopardizing U.S. investment, innovation and job growth.”
LG did not immediately respond to a request for comment. Both South Korean companies cited their plans to make washing machines in the United States.
Several members of Congress, including Senator Tim Scott, a Republican from South Carolina, and Representative Bill Pascrell Jr., a Democrat from New Jersey, wrote the commissioners on Friday to caution that imposing tariffs could have unintended consequences, including by raising prices and potentially costing jobs at Samsung and LG facilities in the United States.Several members of Congress, including Senator Tim Scott, a Republican from South Carolina, and Representative Bill Pascrell Jr., a Democrat from New Jersey, wrote the commissioners on Friday to caution that imposing tariffs could have unintended consequences, including by raising prices and potentially costing jobs at Samsung and LG facilities in the United States.