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Samsung, LG brace for washing machine tariffs as inauguration approaches

Published: 09 Dec. 2024, 17:02

President-elect Donald Trump speaking at an event [YONHAP]

The Korean home appliance industry is keeping a close eye on the incoming U.S. government's future trade policies, industry sources said Monday, as President-elect Donald Trump threatens to hike tariffs on Korean-made washing machines.

In a recent interview with NBC, Trump said he had imposed tariffs on Korean washers during his first term, which he claimed created thousands of jobs in the United States.

In 2018, the U.S. government slapped a 20 percent tariff on the first 1.2 million washing machines imported from Korea and a 50 percent tariff on any additional units.

Although the safeguard expired in February of last year, the new government is expected to take similar measures. Trump has repeatedly pledged to impose universal tariffs of up to 20 percent on all imported goods.

Industry sources said Korean home appliance companies are considering expanding their production of washers and other electronic products.

Major Korean companies, including Samsung Electronics. and LG Electronics, have already set up production systems in the United States for washing machines to respond effectively to the country's protectionism and trade pressures.

Samsung Electronics' South Carolina plant started producing washers in January 2018, and LG Electronics' Tennessee factory began production in December of the same year.

“We are closely monitoring U.S. trade policies and preparing strategies with various possibilities in mind,” an official from one of the companies said.

As part of the response to potential tariffs, LG Electronics has a plan to produce refrigerators and televisions at its Tennessee plant, which currently manufactures washers and dryers.

“We are fully capable of responding to such a situation and are preparing for it,” Son Chang-woo, the head of the Tennessee factory, said during a press conference in June.

But some observers anticipate that the proposed tariffs will not have a big impact on Korean home appliances because of their strong position in the U.S. market.

They pointed out that the 2018 safeguard did not affect the Korean companies' market share.

Instead, Samsung Electronics and LG Electronics have taken the lead in the U.S. washing machine market, followed by Whirlpool and GE Appliance.

“The previous safeguard did not have a significant impact on the industry as a result,” said an industry insider, adding that Korean products have successfully expanded their presence in the U.S. washing machine market.

Yonhap