BUSINESS

[Newsmaker] Samsung starts producing washing machines in US

By Song Su-hyun

Seoul seeks sanction on US with WTO as trade disputes pile up

  • Published : Jan 14, 2018 - 16:27
  • Updated : Jan 14, 2018 - 16:27
Samsung Electronics announced Sunday it has kicked off commercial production of its first US-based home appliance manufacturing facility in Newberry County, South Carolina, a move that hopes to reduce the burden of possible punitive tariffs by the US trade authority.

The company held a ceremony in Newberry to celebrate the official launch of the first US factory Friday. The event was attended by Samsung’s consumer electronics division President Kim Hyun-suk, South Carolina Gov. Henry McMaster and other US politicians.

Samsung said it will invest a total of $380 million into the facility over the next three years, with the aim of annually producing 1 million washing machines and creating over 1,000 jobs. 

US consumers check out Samsung Electronics’ products at a Best Buy shop in Las Vegas on Sunday. Samsung topped the US home appliance market with a 19.3 percent share in the third quarter of 2017, for the sixth consecutive quarter. (Yonhap)

At the two manufacturing and assembly lines in the 14,028-square-meter facility, Samsung will combine its made-in-house components with supplied modules and package them for shipment to US consumers, the tech giant said.

The start of commercial production comes just six months after Samsung announced the company would open the new plant amid increasing protectionist moves in the US.

In November, the US International Trade Commission made a recommendation to the Donald Trump administration to impose a 50 percent tariff rate on large residential washer imports by South Korea’s Samsung and LG Electronics that exceed a quota of 1.2 million units for a duration of three years, in addition to current duty rates.

The recommendation was made in response to a safeguard petition filed by US-based Whirlpool in May.

Whirlpool tops the US washer market with an around 40 percent market share, but the combined share of Samsung and LG of around 30 percent has been increasing.

Kim, head of the consumer electronics Division, expressed concerns about the expected impact of the US safeguard measure last Monday in Las Vegas during his participation in the Consumer Electronics Show.

“We will operate the plant in the US, but I am not sure yet if the plant will be capable of covering all of the shipments to the US market,” Kim said. “The quota figures and possible tariff imposition are unfavorable for Samsung.”

The Trump administration is scheduled to announce a final decision on the issuance of the safeguard measure next month.

Meanwhile, the South Korean government has asked the World Trade Organization for authorization to impose at least $711 million in annual trade sanctions on the US, according to a filing by the WTO released Friday.

The South Korean government made the request by estimating the damage after the US failed to meet a Dec. 26 deadline to comply with a ruling against duties it had imposed on appliances made by Samsung and LG, among others in February 2013.

The US government at the time had applied anti-dumping and countervailing duties on Korean products, which was followed by Korea’s complaint with the WTO in August of the same year. The WTO ruled in favor of the Korean side in September 2016, citing the antidumpting tariffs were imposed through manipulated calculation.

On Friday, Seoul asked for permission to impose an “open-ended amount of trade sanctions” if Washington made the same violation on other products.

By Song Su-hyun (song@heraldcorp.com)

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