LG to Increase Prices of its Washer in the US
The South Korean company, LG Electronics Inc., stated on Wednesday that it would increase the prices of most of its washing machines in the United States, after the Trump administration slapped steep tariffs on imported large residential washing machines.
According to LG’s letter for retailers, the tariffs will affect most front and top load type washers, without stating the magnitude of the price hikes.
U.S. President Donald Trump approved on Monday the recommendations to impose tough safeguards tariffs on washing machines, following the findings by the U.S. International Trade Commission that these imports were “a substantial cause of serious injury to domestic manufacturers.”
A 20 percent tariff will be applied on the first 1.2 million imported washers in the first year, while a 50 percent tariff will be added for the machines above that number.
The ITC’s recommendations, which would protect the American appliance makers including Whirlpool Corp., were made last November to prevent Samsung Electronics Co. Ltd and LG from flooding the U.S. market with cheap washers.
However, President Trump ignored the recommendation from the ITC to exclude the South Korean-produced washers from the tariffs, as the prior for the anti-dumping duties on these machines have been dropped.
Meanwhile, LG has been building a washer factory in Tennessee that will start its production as early as the end of 2018, as Samsung recently started a washer production in South Carolina.
The co-president of the retailer Abt Electronics, Jon Abt, stated that the price of washers are made outside the United States and 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,” Abt stated on Wednesday.
Abt also added that Samsung and LG had been planning for such a move and that their plants in the U.S. would ease 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,” Abt said. He counts LG as its top washer vendors, after Whirlpool, General Electric Co., and Samsung.
According to an LG spokesperson, nothing had been decided on the timing or amount of its washer price increase.
On Monday, LG announced that 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 threatens new jobs in the U.S.
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Ericka Henderson | January 25, 2018