site stats
When It Comes to Trade Whirlpool Tries To Have Its Cake And Eat It Too |

When It Comes to Trade Whirlpool Tries To Have Its Cake And Eat It Too

Whirlpool appliances for sale alongside other brands at a Home Depot store in Chicago. (Photo by Scott Olson/Getty Images)

Whirlpool sells household appliances under brands including Whirlpool, KitchenAid, Jenn-Air, Amana, and Maytag brands. It is currently pushing for 50% tariffs on imported washing machines under a special U.S. law known in trade circles as Section 201. Such a tariff would essentially halt all imports of washers. This case is odd for two reasons: the foreign competitors are building factories in the U.S. and Whirlpool embraced the same foreign competition it now objects to a decade ago when it was to its benefit.


Ten years ago when Whirlpool wanted to merge with Maytag, it argued in favor of the merger by claiming that imports from Samsung and LG would provide sufficient competition in the washing machine market to protect consumers. Yet now, post-merger, Whirlpool is arguing that Samsung and LG washers are too inexpensive and should be effectively blocked by the U.S. government levying a 50% tax on all imported washers. That is a great example of trying to have your cake and eat it, too.

Section 201 is designed to provide U.S. companies with temporary protection from damages caused by an unexpectedly large inflow of imports. Whirlpool is claiming to be damaged by “unexpected” imports even though it used those exact imports to support the case for its merger with Maytag. How can the imports be unexpected a decade after they were touted as beneficial? Even stranger, the entire import situation is about to change.

Samsung is building a washing machine factory in Newberry County, South Carolina. The plant is nearing completion, 250 workers have already been hired, sometime in 2018 the plant will have 500 workers producing washers and possibly other appliances, and eventually nearly 1000 workers will be employed there. LG is just beginning work on a plant in Clarkesville, Tennessee, so soon both major importers will be manufacturing some of their washing machines in the U.S., creating jobs for several thousand Americans.

If Whirlpool’s foreign competitors are already in the process of moving some of their manufacturing footprint to the U.S., why is a trade action needed? This foreign investment in U.S. jobs should lead to an expansion of domestic manufacturing, so it’s not apparent why the domestic industry needs protection from imports manufactured by foreign competitors that are already investing hundreds of millions of dollars in creating jobs in the U.S. and replacing a significant share of their imports with washing machines made here.

Beyond the fact that Whirlpool appears willing to say anything to gain an advantage in the domestic home appliance market, they appear to have tried to use their dominant position to pressure Sears into blocking some of their competitors from prime in-store floor space and maintaining premium prices on Whirlpool’s brands. While Sears is not confirming all details of what transpired, whatever Whirlpool did was enough to make Sears stop selling Whirlpool brands. That’s a really big deal considering that Sears has sold Whirlpool brand products for a century and Whirlpool manufactures many appliances that Sears sells under its own Kenmore brand name.

Once the Whirlpool-Sears dispute is used to place the Section 201 trade case into a clearer context, it appears to me that their claims of damage from imports should be dismissed as simply part of a pattern of anti-competitive behavior by Whirlpool. Samsung and LG are both competing in the marketplace. They are also in the process of moving at least some production to the U.S.

Lower prices benefit all Americans. There is no reason to take that benefit away simply to reward a company bent on winning through crony capitalism instead of by making its customers happy.

Category: Kitchenaid  Tags: ,  Comments off
You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Comments are closed.