Samsung Electronics and LG Electronics expressed regret Wednesday over the U.S. International Trade Commission's (ITC) recommendation to impose a high tariff on Korean-made washing machines.
The U.S. International Trade Commission on Tuesday recommended tariffs to keep Samsung and LG from flooding the U.S. market with inexpensive washers, a step that would protect American appliance giant Whirlpool Corp.
The ITC said a graduated tariff rate should be placed on imports of large residential washing machines above a 1.2 million-unit threshold over the next three years, starting at 50 percent the first year and sliding to 40 percent by the third.
Responding to ITC, Samsung Electronics highlighted its efforts to boost employment in the country.
"We continue to believe no remedy is necessary because our South Carolina factory will begin producing washing machines in early 2018," the electronics company said in a statement on its U.S. subsidiary website, Tuesday.
"We've already hired 350 people who are preparing our factory for production in January, and we are on track to fill another 150 manufacturing jobs in South Carolina by the end of the year."
Samsung Electronics also said the high tariff will consequently damage U.S. consumers and workers.
"Any tariff would raise prices, provide fewer product choices and impair job creation at our South Carolina factory," the company said.
"We strongly urge the administration not to impose any remedy that would harm the workers in our South Carolina factory, or limit them from delivering innovative washing machines, made by Americans for Americans."
LG Electronics also released a statement, Wednesday, saying the ITC recommendation would ultimately harm the retail industry and consumers in the United States.
"The ITC recommendation will limit U.S. consumers' right to choose," LG Electronics said in a statement. "It will also weaken Korean enterprises' presence in the U.S. , and consequently have a negative impact on the operation of U.S. plants that are currently under construction and job creation in the country."
On Tuesday, the ITC said it recommended a 50 percent tariff rate on residential washing machines produced by Samsung Electronics and LG Electronics in response to them exceeding the tariff rate quota of 1.2 million.
The U.S. trade panel also voted unanimously to set the TRQ for washing machine parts at only 50,000 and put a 50 percent tariff on excess quantities in the first year of enforcement.
Samsung has invested $380 million in building a washing machine plant in South Carolina, while LG Electronics has spent $250 million for its own in Tennessee.
Last year, Samsung Electronics and LG Electronics exported a combined $1 billion worth of residential washing machines to the U.S. They hold 16 percent and 13 percent, respectively, in the U.S. washer market. Whirlpool has 38 percent.
Earlier in May, Whirlpool filed a petition to the ITC, requesting a safeguard.
The ITC recommendation will be sent to President Donald Trump by Dec. 4. The U.S. president is expected to make a decision early next year.
The South Korean government on Wednesday discussed countermeasures including diplomatic endeavors to mitigate U.S. safeguard actions on Korean washers. The Ministry of Trade, Industry and Energy met with local washer producers to come up with a joint plan to respond to the decision by the U.S trade authority.
The ministry expects the U.S. government to adopt the safeguards as the ITC ruled in October that the Korean washing machine makers have an adverse impact on the U.S. home appliance industry. It will also review a plan to file a petition against the U.S. safeguards with the World Trade Organization.