Analyst: Louisville's GE Appliances likely to benefit from Trump tariffs on imported washers
Louisville-based GE Appliances will “probably benefit” from President Trump’s decision to impose tariffs of up to 50 percent on imported residential washing machines, one analyst says.
LOUISVILLE, Ky. (WDRB) -- Louisville-based GE Appliances will “probably benefit” from President Trump’s decision to impose tariffs of up to 50 percent on imported residential washing machines, such as those sold by South Korean manufacturers Samsung and LG Electronics, according to an appliance industry analyst.
The tariffs, which go into effect in about two weeks and will last for three years, were announced late Monday by U.S. Trade Representative Robert Lighthizer.
GE Appliances makes washers, among other products, at its Appliance Park factory in Louisville, which employs about 3,600 rank-and-file line workers.
While GE Appliances is a subsidiary of China’s Qingdao Haier Ltd., the tariffs won’t apply to the washing machines made in the U.S.
The tariffs could help GE Appliances and Whirlpool Corp., the two major U.S. appliance manufacturers, capture a bigger share of the market from Samsung and LG, said David MacGregor, an appliance industry analyst with Longbow Research.
“I would suspect there is going to be some share shift associated with this,” he said.
But it’s not clear how Samsung and LG, both of which are building U.S. factories of their own, will respond, MacGregor said. For example, will they curtail imports to U.S.? Have they stockpiled enough machines in recent months to blunt the impact of the tariffs, which were expected?
In a statement, Samsung’s U.S. division said the move will raise prices across the board for U.S. shoppers.
“This tariff is a tax on every consumer who wants to buy a washing machine. Everyone will pay more, with fewer choices,” the company said.
But Whirlpool and GE Appliances applauded the tariffs.
Benton Harbor, Michigan-based Whirlpool, which first complained in 2011 about Samsung and LG “dumping” washers in the U.S. at prices below their cost of production, said the move is a win for American workers and consumers.
“By enforcing our existing trade laws, President Trump has ensured American workers will compete on a level playing field with their foreign counterparts, enabled new manufacturing jobs here in America and will usher in a new era of innovation for consumers everywhere,” Whirlpool Chairman Jeff M. Fettig said in a press release.
GE Appliances’ statement was more muted. The company said it’s “pleased” with decision to impose tariffs.
“As we’ve always done, we will continue to focus on growing our business by investing in new technology, developing new products that delight consumers and creating new U.S. jobs,” the company said in a statement issued by spokeswoman Kim Freeman. She declined to comment further.
Mavis Hui, a Hong Kong-based analyst at DBS Vickers, told Bloomberg News that the tariffs could also prompt China-based Haier to shift production to GE Appliances in the U.S.
Lighthizer, the U.S. Trade Representative, said the tariffs make clear that “the Trump Administration will always defend American workers, farmers, ranchers, and businesses.”
The U.S. International Trade Commission found that imports of washing machines “increased dramatically” from 2012 to 2016 and caused a “substantial” loss in market for domestic producers like Whirlpool.
Samsung and LG’s increasing presence in the appliance market was one factor that GE Appliances often cited in 2015 when it was defending General Electric Co.’s plan to sell the business to Electrolux.
The Electrolux deal ultimately fell apart amid opposition from the Obama administration’s Justice Department. That led GE Appliances to be sold to Haier.
Trump also imposed tariffs on solar cells and modules, saying the U.S. solar industry has “almost disappeared” due to “artificially low-priced” products from China.