By Tom Barkley
The U.S. Commerce Department Wednesday backed Whirlpool Corp.'s (>> Whirlpool Corporation) claims that the company's South Korean rivals are benefiting from unfair government subsidies, setting initial retaliatory duties on imports of washing machines.
Commerce plans to impose countervailing duties of up to 70.58% on large residential washing machines made by Daewoo Electronics Corp., with tariff rates of just 0.22% for those made by Samsung Electronics Co. (SSNHY, 005930.SE) and 1.2% for those made by LG Electronics Inc. (066570.SE).
Since Daewoo declined to participate in the investigation, those higher rates are based on the "adverse facts available," Commerce said.
The announcement could represent just a temporary victory for Whirlpool in its efforts to combat increasing price competition in home appliances, since the company faces several more steps before winning any import relief. Once Commerce makes a final decision, the duties can only go into effect if the U.S. International Trade Commission decides the imports threaten to cause material injury to U.S. producers.
Last month, the Benton Harbor, Mich., company was denied the planned imposition of duties on refrigerators made by Samsung and LG, after the U.S. trade panel determined the imports didn't pose a threat to Whirlpool's business. Commerce had proposed both countervailing and antidumping duties on the fridges.
Commerce also is investigating whether the Korean washing machines are being dumped, or sold at less than normal value, in the U.S. market.
Imports of the washing machines fell to $568.6 million last year from $659.1 million in 2010, and are just below 2009 levels.
-By Tom Barkley, Dow Jones Newswires; 202-862-9275; [email protected]