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South Korea's LG to hike washing machine prices in US after tariffs
[CHICAGO] LG Electronics Inc will raise prices of most of its washing machines in the United States, the South Korean company said on Wednesday, two days after the Trump administration slapped steep tariffs on imported large residential washing machines.
The tariffs will affect most front- and top-load type washers, LG said in a letter to retailers, without mentioning the magnitude of the price hikes.
On Monday, US President Donald Trump approved recommendations to impose tough safeguard tariffs on washing machines, following findings by the US International Trade Commission that these imports were "a substantial cause of serious injury to domestic manufacturers."
A 20 per cent tariff will apply on the first 1.2 million imported washers in the first year, and a 50 per cent tariff on machines above that number.
The ITC's recommendations, which would protect American appliance makers including Whirlpool Corp, were made in November to keep Samsung Electronicd and LG from flooding the US market with inexpensive washers.
Trump ignored a recommendation from the ITC to exclude South Korean-produced washers from LG from the tariffs, as prior anti-dumping duties on these machines have been dropped.
Anticipating such a move, LG has been building a washer factory in Tennessee that will begin production as early as the end of 2018, while Samsung recently began washer production in South Carolina.
Jon Abt, co-president of retailer Abt Electronics, said the price of washers made outside the United States may increase only by about US$50 as he expected the tariff to be borne by manufacturers rather than consumers.
"If somebody really wants an LG washer, they're going to spend that extra money for it," Mr Abt said in an interview on Wednesday, adding that Samsung and LG had been planning for such a move and that their US plants would mitigate the blow from the tariff.
"The indications we're getting from our manufacturing partners is that this shouldn't have a huge impact on their overall business," he said.
Mr Abt counts LG among its top washer vendors, after Whirlpool, General Electric and Samsung.
An LG spokesman said nothing had been decided on the timing or amount of its washer price increase.
LG said on Monday it was disappointed by the tariff move and called it a "misguided decision" that would hinder the ramp-up of its plant in Tennessee and that threatens new US jobs.