Samsung, LG Warn US Government About Washer Safeguard’s Effects To Consumers, Jobs

South Korean companies Samsung Electronics and LG Electronics are now calling on the U.S. government regarding the import restriction, known as a safeguard, that will be implemented against their washing machines. For the tech giants, the government will do more harm than good not only to the companies but also to the consumers if the safeguard is implemented.

Samsung and LG have issued statements in response to the International Trade Commission’s move to impose a safeguard measure on the companies’ washing machines. The measure is seeking to impose higher tariffs, so the tech giants are anticipating a negative impact out of this, as per The Investor.

“Any extra tariffs will raise prices, provide fewer product choices and impair job creation at our South Carolina factory,” Samsung said in a statement. The Galaxy Note 8 maker then pointed out that it has been a contributor to the U.S. economy’s growth by providing jobs to people living in the country. This is in direct response to the claim that non-American companies are hurting the domestic washer industry.

On the other hand, LG indicated in a press release that the safeguard measure that the ITC is planning to implement will surely have a negative impact on U.S. consumers. As per the LG V30 maker, the tariffs on imported washers will definitely limit the consumers’ options.

The ITC recommendations that were announced on Wednesday are expected to be ratified by U.S. President Donald Trump in early 2018. Once implemented, the measure will subject imported residential washers to a tariff-rate quote for three years. As part of the recommendations, Samsung and LG washers exceeding 1.2 million units will be slapped with a 50 percent tax rate in addition to the current rate of duty.

The recommendations were made after Michigan-headquartered manufacturer Whirlpool filed a safeguard petition with the ITC, saying that both Samsung and LG are allegedly hurting the U.S. market by importing their products to the country. In its petition, Whirlpool asked that all washing machine imports should be levied a 50 percent tariff.

Apart from responding to the issue, Samsung and LG also vowed to start operations of their new U.S. plants as early as possible in hopes of minimizing the possible impact of the likely sanction on their washers, according to Korea Herald. “In preparations against the possibility of the U.S. government issuing the safeguard measure, LG will seek a plan to move forward operation of the Tennessee factory currently under construction to minimize the impact,” LG said in a statement.

LG is currently constructing a $250 million washer factory in Tennessee. The structure is anticipated to have an annual capacity of 1 million units by the first quarter of 2019. Samsung is also building a $380 million plant in South Carolina, and it is scheduled to commence operations early next year.

“It will take some time to localize all parts procurements for washing machines, although the factory starts working. It is not certain yet to say how much the new factory can help reduce the safeguard impact,” a Samsung official said.