Whirlpool Seeks Protection From Unfair Foreign Competition
It is no secret that labor is cheaper overseas, and this makes it difficult for companies that produce in the United States to compete. Despite this fact, Whirlpool Corp. has been making an effort to expand its production in the U.S. That production could be in jeopardy due to alleged dumping of washing machines by South Korean companies such as LG and Samsung. This has caused Whirlpool to ask the U.S. government to impose duties on these companies’ imports to level the playing field and allow Whirlpool to continue manufacturing in the U.S.
The company currently makes washing machines in a plant in Clyde, Ohio, a city of 6,000 people 50 miles from Toledo. The plant has over 3,000 employees, making it the largest employer in the city by far, but those jobs could be lost if Whirlpool’s sales don’t improve. Whirlpool claims that South Korean companies have been benefiting from government subsidies, making it possible for those companies to dump washers into the U.S. at below market cost. They claim this allows for anti-competitive pricing, such as the sales LG and Samsung ran on Black Friday where many washers were sold at over a 50 percent discount. Whirlpool was not able to offer this level of sale, and the company claims it lost market share as a result.
This is the second time this year that Whirlpool has asked for government protection from unfair foreign competition. Last March the company asked for protection for its refrigerator manufacturing division, who had been facing pricing pressure from the same companies they are concerned about in the washing machine request. The Commerce Department ruled in favor of Whirlpool’s request, saying that duties of up to 37 percent could be placed on the refrigerators in question. Whirlpool is hoping for a similar ruling in the case of washing machine dumping.
The washers that are allegedly being dumped are manufactured in Mexico and South Korea, two countries with which the United States now has bilateral trade agreements. When companies use our open borders to gain market share and put our companies out of business, as appears to be the case in this dispute, it lends evidence to the fact that free trade is not working for us. We should not be rewarding countries that subsidize their industries with even more access, we should be looking out for how to best protect our jobs and our manufacturing base.