US state governments oppose high tariffs on S.Korean companies

(A Samsung Electronics factory is being constructed in the US state of South Carolina. Southern governors are objecting to placing high tariffs on Korean firms that are employing domestic workers. (provided by Samsung Electronics))

US state governments oppose high tariffs on Korean companies

By Lee Wan, The Hankyoreh, Oct. 21, 2017

Firms are building plants in the American South and trade restrictions will hurt local jobs

“Considering that Samsung Electronics is planning to build a home appliance factory in Newberry County by 2019, imposing high tariffs on the company will threaten opportunities to create jobs and will inflict a severe blow on the local economy.” – South Carolina Governor Henry McMaster

Even US state government officials attended a hearing at the US International Trade Commission (USITC) about “safeguards” (temporary restrictions on imports) on washing machines by Samsung Electronics and LG Electronics to argue that safeguards measures are unfair. South Korea’s Ministry of Trade, Industry and Energy reported on Oct. 20 that senior officials (including a governor and cabinet member) from the states of South Carolina and Tennessee, where Samsung and LG are building local home appliance factories, had opposed what they regard as the unfair request of US company Whirlpool for safeguard measures in a hearing hosted by the USITC on Oct. 19.

When Whirlpool previously asked the USITC for trade relief against global home appliance companies exporting washing machines to the US after its market share in the washing machine industry fell, the agency concluded that “the production and competitiveness of domestic industry is suffering severe damage or the threat of such damage because of the rapid increase of the sales volume of imported washing machines.”

“I support fair trade, but I don’t regard this case as meriting safeguard restrictions. I’m standing here today both because this is important and because I am opposed to any kind of trade restrictions being placed on Samsung,” McMaster said. Ralph Norman, the congressman representing Newberry County, and the commissioner of the Tennessee Department of Economic and Community Development (an LG Electronics home appliance factory is supposed to be built in Tennessee) also attended the hearing and testified against safeguard restrictions.

South Korean companies including Samsung and LG also attended the hearing and argued that if the safeguards were imposed, the ultimate victims would be American retailers and consumers.

“If import restrictions are imposed on these products and parts, American consumers won’t be able to access innovative washing machines like the FlexWash. Furthermore, the factory in South Carolina will have difficulties bringing Samsung’s full lineup to the market,” said John Herrington, Senior Vice President of Samsung Electronics America.

“If the US foundation of South Korean companies is weakened by safeguard measures, it could ultimately delay the normal operation of local factories that are currently under construction, and this could have a negative impact on the local economy, including the creation of jobs inside the US,” LG Electronics said.

LG will be investing US$250 million in its US washing machine factories through the first quarter of 2019, for which it expects to hire 600 local workers. The results of this debate will help the USITC vote on whether to use safeguards and if so, how, by Nov. 21. It’s planning to report its decision to President Trump by Dec. 4.

By Lee Wan, staff reporter and Park Soon-bin, senior staff writer

- - - - - - -