LG Electronics' washing machine-manufacturing plant in Tennessee / Courtesy of LG Electronics
Korea wins WTO ruling in washing machine dispute with US
By Baek Byung-yeul
The latest ruling by the World Trade Organization (WTO) over the Trump-era washer safeguard tariffs is expected to provide an impetus for Korean firms to strengthen their presence in the United States as the decision will clear uncertainties associated with the trade dispute, industry sources said Wednesday.
They expect that tariffs imposed on Samsung Electronics, LG Electronics and other Korean companies could be lifted in the U.S. as the WTO ruled against Washington's trade restriction measures on washing machines made by Korean companies.
On Tuesday, the WTO said the U.S. violated international trade obligations by imposing tariffs on Korean exports of washing machines. In February 2018, the Donald Trump administration accepted claims from domestic companies such as Whirlpool that imported washers caused great damage to them and began imposing a 20 percent tariff on the 1.2 million imported washers produced by foreign makers and a 50 percent tariff on excess quantities.
The measure, scheduled to expire in February 2023, was virtually aimed at Samsung and LG, which were increasing their dominances in the U.S. home appliance market. In response, the Korean government filed a complaint with the WTO against the U.S. imposition of the tariffs, claiming they were unfair.
Industry officials said the Korean industry welcomes the ruling, which resolves certain risks and uncertainties in their businesses. They also expected the dominance of Korean home appliance makers to grow.
"The industry expects the WTO's decision will help enhance Korea's status and put a brake on the abuse of safeguards in addition to washing machines," the official said.
Spokespeople from Samsung and LG refused to comment on the ruling, saying the issue is government related.
The Ministry of Trade, Industry and Energy announced it welcomed the WTO's favorable rulings on all five substantive claims, adding the country hopes to resolve the issue with Washington as soon as possible. The U.S. government can appeal the ruling within the next 60 days.
"If the U.S. accepts the WTO panels' judgment as it is, the dispute will end, but if it appeals, the dispute will continue. We plan to make efforts to end the U.S. government's washing machine safeguard measures early," a trade ministry official said. "The government will also actively utilize the WTO's dispute settlement procedures to protect the interests of our industry in the future."
However, some sources in the local home appliance industry said Wednesday that they don't think the WTO ruling will bring a positive impact immediately, because those home appliance makers built their own manufacturing plants in the U.S. to minimize the impact of the tariffs.
"The tariff measure was taken after Korean manufacturers established a local production system, so the industry has judged that the WTO's ruling will have a limited impact," said an industry official asking to remain anonymous.
Samsung and LG began operating their production facilities in the U.S. states of South Carolina and Tennessee, respectively, starting 2018.
