There’s a very simple and easy way to create American jobs: Apply tariffs on U.S. imports.
That’s exactly what the U.S. International Trade Commission (ITC) proposed we should do according to a November 22, 2017, Reuters article.
According to a March 9, 2017, Wall Street Journal article, Samsung had announced plans to invest $300 million in the United States and shift some assembly of oven ranges to the U.S. from Mexico, which could create around 500 jobs.
But that wasn’t the only important announcement last March. Samsung’s recent interest in American investment was influenced by tough trade policy talk from our current U.S. president.
Despite Samsung’s announced intentions, a December 2017 report from the ITC says that if we don’t apply import tariffs on Samsung (and on their South Korean crosstown rival LG) washing machines, there will be less incentive for these companies to “follow through fully on their planned investments, particularly in light of their substantial recent investments in … production for the U.S. market in Thailand and Vietnam.”
What’s more, import tariffs on LG (formerly Lucky-Goldstar) and Samsung will help protect the American workers employed by American-owned Whirlpool. No major appliance maker has more American factories and employs more American workers than Whirlpool.
Whirlpool CEO Jeff Fettig recently said, “Without safeguard relief, it is hard to see how we maintain our competitiveness in the face of a continued onslaught of low-priced imports” and “This type of corrective action will create U.S. manufacturing jobs.”
The Whirlpool CEO is absolutely correct. In addition to Samsung’s planned U.S. investment, LG has announced its intention to build a new home-appliance factory in Tennessee, which could create 600 jobs.
It seems LG and Samsung have finally figured out that they will need to bring more jobs to the United States. In a statement, an LG spokesperson said, “Soon, competition in the washer market will not be about domestic vs. foreign production. It will be about competition among washers made in the United States, in Ohio, Kentucky, Tennessee and South Carolina.”
President Trump plans to decide early this year whether or not to follow the recommendations of the ITC, which include a 50 percent tariff on imported washing machines that exceed a total of 1.2 million units per year.
Even the free trade-leaning Obama administration upheld Whirlpool’s petition for tariffs on Samsung and LG washing machines imported from Mexico and South Korea in January 2013.
LG and Samsung have moved manufacturing plants to five different countries in an attempt to avoid anti-dumping tariffs being applied by the U.S. on their imported washing machines. “Dumping” means companies (like LG and Samsung) are selling their products below the cost of production, usually with the intent to steal market share from their competitors.
Fettig added, “A global safeguard is absolutely critical because it is the only tool available under U.S. trade law that can remedy the impact of Samsung and LG’s evasive ‘country hopping’ behavior.”
Finally, it seems, the jig is up. It’s clear that LG and Samsung now realize they will have to increase investment and jobs in the United States. It’s equally clear that imposing U.S import tariffs on foreign companies that don’t compete fairly is what is required to make these investments happen.
Since we have kept up the pressure on companies that engage in illegal dumping, they are now preparing to invest in the United States and transfer production here. Just like the ITC report recommends, we need to stay the course and continue to impose import duties so that LG and Samsung will follow through with their planned investments in the U.S.