Feds rule on washer 'dumping' by appliance makers
The feds have issued a preliminary ruling against two competitors of an appliance maker in the region for underpricing washing machines produced outside of the United States and sold into the U.S. market.
Benton Harbor-based Whirlpool said this week that it filed a petition with the U.S. Department of Commerce and the U.S. International Trade Commission in December against competitors Samsung and LG over the illegal practice, which is also known as “dumping.”
In the petition, Whirlpool accuses Samsung and LG of a “long-term, repeated pattern of pricing below cost.”
The petition is related to full size, top-load clothes washers and full size, front-load clothes washers. It also includes certain washer components for large residential clothes-washer cabinets, tubs, baskets and drums.
This week, the federal government agreed with Whirlpool.
The U.S. Department of Commerce, or DOC, issued an anti-dumping ruling against Samsung and LG, according to Whirlpool.
A Samsung representative sent a statement to the Business Journal in response to the ruling:
“Samsung did not engage in unfair trade practices and is disappointed with the U.S. Department of Commerce’s preliminary determination. American consumers stand to lose the most with limited choices and higher prices.
"We remain committed to fair competition and delivering innovation to the marketplace. We have a long-term commitment to investing and creating jobs in the U.S., and we will continue to deliver products that meet the highest standards in design, performance and quality to our customers.”
As a result of the DOC ruling, Samsung and LG will be required to pay cash deposits on clothes washers imported into the U.S. from their production facilities in China.
The cash deposit rate for Samsung is 111.09 percent, and the rate for LG is 49.88 percent, which are equivalent to the anti-dumping margin found in the preliminary determination, times the entered value of the washers.
The deposits are a security for future duty liability with each entry of subject washing machines.
The DOC also decided to apply Samsung's dumping rate retroactively 90 days.
LG said it disputes the DOC’s preliminary anti-dumping determination, calling into question the methodology used by the organization in determining the anti-dumping rate of 49.88 percent.
“The unexpectedly high preliminary rate reflects an outrageous anti-dumping margin calculation methodology adopted by the Commerce Department,” the company said.
According to LG, “In calculating its preliminary rate for some of the component parts, the Commerce Department chose values that are many times higher than the true market cost of the component parts. Such methodology artificially increased the anti-dumping margin by a large amount.”
LG said it intends to explain to the Commerce Department how and why LG’s anti-dumping rate should be much lower.
In 2013, the federal government also found that Samsung and LG were dumping large residential clothes washers exported to the U.S. from their production facilities in South Korea and Mexico, according to Whirlpool.
Whirlpool said following that ruling, Samsung and LG moved their washer production for the U.S. to China, “skirting the order and continuing to dump into the United States.”
Marc Bitzer, president and chief operating officer at Whirlpool, said that the ruling is an important step forward in an “effort to stop serial dumping practices by Samsung and LG and uphold free and fair trade practices.”
Bitzer said open, rules-based trade ensures the “highest level of innovation and choice for consumers."
The DOC is scheduled to announce its final determination on the most recent petition on or about Dec. 9.