By David Lawder
WASHINGTON (Reuters) - Whirlpool (NYSE:WHR) and GE Appliances asked a U.S. trade panel on Thursday to recommend 50 percent import duties on large residential washing machines to ensure that rivals LG and Samsung follow through on plans to shift washer production to the United States.
At a hearing in a "global safeguard" trade case that could lead to U.S. President Donald Trump imposing steep import restrictions, lawyers for the U.S. producers accused the South Korean companies of being "country hoppers" that have moved output several times to avoid prior anti-dumping duties.
"They have cheated domestic producers before. This is our last chance to get it right," Whirlpool attorney Jack Levy told the U.S. International Trade Commission.
The commission on Oct. 5 unanimously found that surging imports of large residential washers from Samsung Electronics (KS:005930) and LG Electronics (KS:066570) were injuring domestic producers. It is scheduled to make remedy recommendations by Dec. 4 to Trump, who is expected to make final recommendation early next year.
Levy argued that a strong remedy would force the South Korean manufacturers to "country hop one more time, to America," where they would compete more fairly and strengthen the U.S. manufacturing base.
Whirlpool and GE Appliances, bought last year by China's Haier Group (SS:600690) (HK:1169), are also seeking import quotas on key components such as washer cabinets, tubs and basket assemblies to prevent Samsung and LG from opening U.S. "kitting," or "screwdriver" operations that simply assemble machines largely from imported parts.
Daniel Porter, an attorney representing LG, said a 50 percent duty would severely hurt LG and Samsung by shutting their imports out of the U.S. market until they start U.S. production in 2019. Losses to market share would be difficult to claw back, he added.
Samsung is converting a closed Caterpillar Inc (N:CAT) generator factory in Newberry, South Carolina, planned to eventually employ nearly 1,000 workers, while LG is building an all-new factory in Clarksville, Tennessee, that would employ around 600.
Porter said these factories would likely employ fewer workers if import restrictions kept Samsung and LG washers out of the U.S. market for a year.
"Whirlpool's 50 percent proposal is nothing short of raw, naked protectionism to allow Whirlpool to reach a cash windfall for a year or two," Porter told the panel.
Both sides brought out members of Congress representing their plant locations to help argue their cases.
"Samsung brought hope, they brought jobs, they put food on the table for many residents," said Representative Ralph Norman, a South Carolina Republican.