By Andrew Tangel
Foreign makers of such products as washing machines and solar
panels are ramping up shipments to the U.S. ahead of government
decisions on whether to erect new barriers, trade data show.
The influx of goods comes after companies including appliance
giant Whirlpool Corp. and solar-panel maker Suniva Inc. asked the
Trump administration in recent months to use powers under a
controversial trade law that gives the president wide discretion on
tariffs and quotas.
The two cases are among the early tests of President Donald
Trump's "America First" trade policy and his pledges to help U.S.
manufacturers and factory workers.
Ships brought 9,063 containers' worth of large residential
washers to U.S. ports in November, more than double the previous
year's clip, a month after American regulators sided with Whirlpool
in a dispute with South Korean rivals Samsung Electronics Co. and
LG Electronics Inc., according to an analysis of customs and U.S.
Census Bureau data from research firm Panjiva. Samsung and LG had a
combined 35% share of the retail U.S. washer market last year,
roughly equal to Whirlpool's.
Myles Getlan, an attorney for Whirlpool, said recent import
levels were a sign that competitors were stockpiling washers. "It
has the potential to undermine the effectiveness of any remedy that
the president could impose," he said.
An LG spokesman said the potential for new trade barriers played
a role in the company's increased washer shipments but denied it
was stockpiling. He said the company also weighed other factors
including increasing demand, shifts in distribution and new retail
opportunities. A spokeswoman said Samsung looked forward to
"continuing to meet strong consumer demand for our premium washing
machines."
At the increased import rates, as much as six months' worth of
surplus washer inventory could arrive in the U.S. before any
tariffs go into effect, Longbow Research analyst David MacGregor
said.
It wasn't clear how the import surge would affect retail prices
of washing machines. Analysts predict tariffs on overseas
manufacturers' washers would eventually get passed on to consumers,
but Freedonia Group analyst Kyle Peters said additional imports
before new trade costs could postpone any price increases.
U.S. import volumes for solar panels and related products also
more than doubled, to the equivalent of 12,379 shipping containers
in November, compared with the previous year, Panjiva trade data
show.
U.S. trade regulators in September agreed with Suniva and
SolarWorld Americas Inc., two solar-panel makers with U.S.
factories, that the domestic industry had been harmed by imports
and later recommended tariffs.
Trade data offer a limited window into companies' export
decisions, which can be influenced by seasonality, demand and
trade. But Panjiva trade analyst Christopher Rogers said
manufacturers expecting new trade barriers often boost shipments
and "there hasn't been anything put in place saying you can't do
this."
Their attitude, he said, is: "Let's get while the getting is
good."
The imports come amid a continuing debate over free trade and
protectionism. Opponents of new tariffs and other trade barriers
argue they distort open markets and are harmful to consumers, while
many U.S.-based companies and workers say they protect domestic
industries and jobs. Companies that support additional trade
barriers say the rise of imports could undercut new protections
they claim they need to fend off harmful foreign competition.
Mr. Trump has until early 2018 deadlines to make decisions on
potential trade barriers in the cases involving washers and solar
panels as well as two separate ones involving steel and aluminum.
After receiving recommendations from trade regulators, the
president has wide latitude to decide whether to impose
restrictions and what type.
Whirlpool, the Michigan-based appliance company, and solar-panel
makers with U.S. factories are seeking protection under a 1970s-era
provision known as the safeguard law, claiming their businesses
have suffered serious injury from imports, not from unfair trade.
The U.S. hasn't imposed tariffs under the law since 2002.
Members of the U.S. International Trade Commission in November
issued recommendations to the Trump administration that include
tariffs of up to 50% on imported washers exceeding a quota of 1.2
million units annually. The U.S. imported 10.3 million washing
machines of all types in the 12 months ending Oct. 31, Panjiva
trade data show.
The office of U.S. Trade Representative Robert Lighthizer held a
hearing on Whirlpool's case Wednesday and a decision by Mr. Trump
is expected by Feb. 2. Decisions in the other trade cases are
expected early this year.
Trade data show U.S. imports of LG washers were down 9% in
November compared with the previous year, but nearly triple the
level the month before trade regulators ruled for Whirlpool.
U.S. imports of Samsung washers were up 52% year over year,
trade data show. November's imports were up 40% from September, the
month before the trade commission's decision finding domestic
washer makers had been injured.
LG and Samsumg, both of South Korea, say they have won over
American consumers with sleek designs and innovative features,
gaining U.S. market share through fair competition. Both companies
plan to open factories in the U.S. this year.
Solar-panel makers are seeking their own safeguard protection.
Tim Brightbill, an attorney for SolarWorld Americas, said the
import increase highlighted the need for broad protections that
foreign companies couldn't circumvent. "When the president
proclaims relief, it needs to be as comprehensive as possible," Mr.
Brightbill said.
The Solar Energy Industries Association, whose members include
American buyers of solar panels, has opposed the protection sought
by SolarWorld and its ally Suniva, which has sought bankruptcy
protection amid a glut of low-cost imported solar panels. It argues
the U.S. energy industry could suffer if tariffs push up prices on
solar panels.
The solar panel makers "continue to build their case on the
premise that they are entitled to a U.S. government bailout because
of their abject and numerous failures as manufacturers," an
association spokesman said. Suniva's parent is based in Hong Kong,
SolarWorld's in Germany.
A Suniva spokesman said: "Evidence of stockpiling proves that
China and its proxies will always game the system at every turn and
reinforces why the only solution to prevent China's cheating is for
President Trump to provide a remedy strong, long and effective
enough to cause American factories to reopen and rehire."
The Trump administration, meanwhile, announced in April it would
investigate whether to limit steel and aluminum imports on national
security grounds.
Trade data show the U.S. imported $2.4 billion worth of steel in
October, up 37% from the previous year, and $1.9 billion worth of
aluminum that month, up 26%.
The increase has fueled U.S. steelmakers' calls for tariffs amid
a rebound in steel prices globally and demand for American steel.
The U.S. aluminum industry has complained of excess capacity and
unfair trade practices by foreign producers.
Write to Andrew Tangel at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
January 03, 2018 19:49 ET (00:49 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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