Go back a decade ago and you would see that the Whirlpool Corporation was dominating the United States’ appliance market. However, due to unfair business practices, the combination of two large Korean companies are now neck and neck with the tumbling market share of the American company. By 2010, both LG and Samsung had entered the U.S. market with bells and whistles with their appliances and led you to believe that superior products are what contributed to their skyrocketing market share.
In 2012, Whirlpool was successfully able to persuade the Department of Commerce in the United States to impose antidumping duties on the washers made in Korea and Mexico, the main locations that LG and Samsung were producing their washers. Dumping, in the terms of international trade, is when a foreign company sells products below cost to cause harm to domestic companies. From doing so, LG and Samsung began to gain more market share. When Whirlpool’s claims of dumping were verified and antidumping duties were imposed, the Korean companies moved their production to China. As antidumping duties are country specific, LG and Samsung successfully “country hopped” to evade the tariffs. By the end of 2012, the Korean companies had approximately 19% of the market share, even though they were in single digits years before.
Due to LG and Samsung’s ability to avoid the tariffs, the Korean companies were able to keep their prices low. In fact, they were still so low that when Whirlpool went back to the Department of Commerce in 2015 to claim dumping again, LG and Samsung hopped again and moved to Vietnam and Thailand. Whirlpool’s lowering market share and loss of sales, according to them, forced delayed hiring, operating losses, and lowered investments in newer products. However, from imposing additional tariffs to their products, LG and Samsung state that it harms consumers with higher prices, limits their choice, and stifles their innovation. It seemed like an unending cycle until a new president took an oath to office, campaigning highly on bringing production back to America.
With Trump’s presidency, Whirlpool hoped they could get more aggressive protection from this situation. So, instead of antidumping duties, they were trying to get “safeguard” laws in place which only need to show that the U.S. has suffered “serious injury” from the imports. In December 2017, to Whirlpool’s relief, the International Trade Commission recommended to Trump’s administration to have a 50% additional duty on imported washers exceeding quota of 1.2 million units annually and a 50% additional duty on large washer parts exceeding 50,000 units. As a new year gift in January 2018, the Trump administration intends to go through with the tariffs up to the 50% as LG and Samsung plan to move more production to the United States. From all of this, the Korean companies may file formal complaints with the World Trade Organization to counteract the claims that they have been using unfair business practices.