LG Rushes Tennessee Washer Plant In Response To US Safeguards

LG Electronics has decided to rush the construction of its first washing machine plant in the United States. The facility was previously expected to commence operation in 2019. However, the South Korea tech company is now eager to have it up and running later this year.

Yonhap reported Thursday that LG is advancing the planned operation of its Tennessee-based washer plant in response to the U.S. government’s imposition of new tariffs on imported washers. Instead of starting the facility’s operation in early 2019, the plant is now scheduled to begin production of washers either in the late third quarter or early four quarter of this year.

LG broke ground at the site of its new washer facility back in August 2017. The 829,000-sqaure-foot plant is projected to cost $250 million, and it is said to have an annual capacity of more than 1 million units of front- and top-loading washers. U.S. News has also learned that the factory will create 600 new jobs.

LG’s decision comes days after U.S. President Donald Trump’s stand on the recommendations raised by the International Trade Commission over imported washers was made public. Samsung’s neighboring rival initially expressed its disappointment over the new safeguard measure.

“We are very disappointed in this misguided decision, which far exceeds what the US ITC recommended,” LG said in a statement. The company then subtly shaded Whirlpool when it said, “This is a textbook case about how certain companies can game the process to use trade laws to try to accomplish what they can’t accomplish in the marketplace.”

It can be noted that the recommendations were originally raised by the U.S. home appliance company. Whirlpool filed a safeguard petition with the ITC, claiming that both LG and Samsung are hurting the U.S. market by importing their washers to the country. Whirlpool specifically asked in its petition that imported washers should be levied a 50 percent tariff.

With the new safeguard measure in place, the government is now imposing a 20 percent tariff on the first 1.2 million units of imported washers and a 50 percent tariff on the number of washing machines that will exceed this limit. In the third year, the tariff rates are expected to decline to 15 percent and 40 percent, respectively.

In response to the restrictions, South Korean Trade Minister Kim Hyun-jong has vowed to file a petition with the World Trade Organization. “Based on my experience as a member of WTO’s Appellate Body, I think things are favorable for the Korean side,” Kim said during a meeting with government agencies and businesses earlier this week.