By Andrew Tangel
Foreign makers of products including 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 pledges
to help U.S. manufacturers and factory workers.
Ships brought large residential washers to U.S. ports at more
than double the previous year's clip in November, 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.
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.
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.
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
U.S.-based companies say they protect domestic industries and jobs.
Supporters of 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.
In the washer case, members of the U.S. International Trade
Commission in November issued recommendations that include tariffs
of up to 50% on imported washers exceeding a quota of 1.2 million
units annually.
Myles Getlan, an attorney for Whirlpool, said that 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.
The office of U.S. Trade Representative Robert Lighthizer is
slated to hold a hearing on Whirlpool's case on Jan. 3, and a
decision by Mr. Trump is expected by Feb. 2. Decisions in the other
trade cases are expected early this year.
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.
Trade data show LG's U.S. imports of all washers were down 9% in
November compared with the previous year, but nearly triple the
level the month before trade regulators ruled for Whirlpool.
Samsung's November U.S. washer imports 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. A spokeswoman said Samsung
looked forward to "continuing to meet strong consumer demand for
our premium washing machines."
The South Korean manufacturers 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 U.S.-based 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.
"These foreign firms 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 05:44 ET (10:44 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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