The US Commerce Department yesterday backed Whirlpool Corp's claims that the company's South Korean rivals were benefiting from unfair government subsidies, and has put in place initial retaliatory duties on imports of washing machines.
The department plans to levy countervailing duties of up to 70.58 per cent on large residential washing machines made by Daewoo Electronics Corp, with tariff rates of 1.2 per cent for those made by Samsung Electronics Co and 0.22 per cent for those made by LG Electronics Inc.
Since Daewoo turned down an invitation to be part the investigation, the higher rates are based on the "adverse facts available," Commerce said.
According to analysts, the development could prove to be only a temporary victory for Whirlpool in its bid to take on rivals competing on price in home appliances, since the company faced several more steps before winning any import relief.
Once the commerce deparment made a final decision, the duties would take effect if the US International Trade Commission decided the imports threatened to cause material injury to US producers.
"Samsung 005930 respects the trade rules in the US market, and is confident that once the full investigation is concluded, the US Department of Commerce will confirm that Samsung is in compliance with US trade laws. We will continue to meet the demand from US consumers for our superior washing machines," said Samsung Electronics' spokeswoman Chenny Kim following the ruling.