US approves probe into washing machine imports

Washington: A US trade panel on Friday approved investigations that could lead to steep import duties on more than $1 billion (Dh3.67 billion) of washing machines from South Korea and Mexico and more than $150 million of wind energy towers from China and Vietnam.

The US International Trade Commission agreed there was reasonable evidence that imports from the four countries were harming domestic producers. That allowed the US Commerce Department to continue investigations already under way.

The trade panel also approved a third probe on steel wire garment hangers from Taiwan and Vietnam.

In each case, the Commerce Department will set preliminary duty levels in coming months. The ITC must vote its approval again for final duties to take force.

Trade frictions

The wind tower case adds to a raft of US-China trade frictions before a visit by China's likely next leader, Vice-President Xi Jinping, to Washington this week.

Century-old American manufacturer Whirlpool has accused South Korean rivals Samsung Electronics and LG Electronics of selling washers in the United States at prices 31 per cent to 82 per cent below fair market value.

It also says washing machines imported from Mexico undercut US prices by 27 per cent to 72 per cent.

South Korea's government has protested the probe, which follows a similar investigation requested by Whirlpool that already has led to US duties on refrigerator imports from South Korea and Mexico involving the same manufacturers.

Aggressive fight

The ITC vote "validates the actions we've taken to protect the US domestic appliance industry, our 23,000 US employees and the communities in which they work," Whirlpool spokeswoman Kristine Vernier said in a statement.

LG said it would aggressively fight the case as it moves toward the final ITC vote later this year.

"LG looks forward to the opportunity to show why imports from LG, a leading innovator in the washer machine industry, have in no manner injured Whirlpool," said Chris Jung, president of the home appliance unit of LG Electronics USA.

US washing machine imports from South Korea and Mexico were an estimated $659.1 million and $450.2 million, respectively, in 2010, according to the Commerce Department.

Samsung said in a statement it was concerned Whirlpool's action "will ultimately reduce choice and value for the American consumer" and expressed confidence the ITC would reject final duties when it votes again.

Meanwhile, the Wind Tower Trade Coalition, a group of US producers, alleges China undercuts US wind tower prices by more than 200 per cent and Vietnam undercuts US prices by more than 140 per cent.

The towers, used in large-scale wind farms, can stretch more than 100 metres into the air. They support the blades and housing for wind turbines.

China has warned the wind tower case, and a separate US investigation targeting Chinese-made solar panels, could harm bilateral cooperation in the clean energy sector.

Supply constraints

German manufacturing giant Siemens, which imports many wind towers from Asia, also opposes the duties.

"Domestic manufacturers have proved themselves unreliable and unwilling often to provide supply," Christopher Hauer, director of Siemens tower operations in the United States, told the ITC last month.

The United States imported an estimated $103.6 million and $51.9 million of the towers from China and Vietnam, respectively, in 2010.

Friday's vote came shortly after new data showed overall US imports grew nearly 14 per cent in 2011 to a record $2.66 billion. Periods of rapidly rising imports often lead to more trade cases being filed.