The U.S. International Trade Commission (ITC) will prescribe a set of tariff rate quotas which it believes will help stem the rising tide of large residential washers being imported into the United States at quantities that currently harm domestic manufacturers of these products, the commission said in a statement.
The ITC will forward its recommendations in a report to President Trump on Dec. 4. It will be up to the president to make the final decision whether to provide relief to the U.S. washer industry, in this case, and what type of relief, including with respect to imports from countries in U.S. free trade agreements, should be applied.
The four ITC commissioners unanimously recommend that the president impose a tariff-rate quota (TRQ) on imports of large residential washers for a duration of three years.
For U.S. imports of large residential washers that exceed 1.2 million units, the commissioners recommend a tariff rate of 50 percent ad valorem, in addition to the current rate of duty. They also recommend that the in-quota volume remain constant throughout and that the above-quota tariff rate decrease by five percentage points during each year of the remedy period.
ITC Chairman Rhonda Schmidtlein and Commissioner Irving Williamson additionally recommend an in-quota tariff rate of 20 percent ad valorem, which would decrease to 18 percent in the second year of the remedy period and 15 percent in the third year of the period, in addition to the current rate of duty. Vice Chairman David Johanson and Commissioner Meredith Broadbent do not recommend an in-quota tariff rate for large residential washers.
The commissioners also unanimously recommend that the president impose a separate TRQ on imports of covered parts of large residential washers for a duration of three years. For U.S. imports of covered parts that exceed 50,000 units, they recommend a tariff rate of 50 percent ad valorem, in addition to the current rate of duty. They also recommend that the in-quota volume increase by 20,000 units in each year of the remedy period, and that the above-quota tariff rate decrease by five percentage points each year.
The TRQs take aim at South Korea’s washing machine exporters, namely LG and Samsung, who in recent years have gained an increasingly larger percentage of the U.S. market.
The ITC’s determination was part of a rarely used investigative mechanism, known as section 201.Authorized under the 1974 Trade Act, section 201 allows the commission to determine if a domestic industry is harmed by imports and then make recommendations for a remedy to the president.
The commission took up this section 201 investigation as part of a petition filed by Benton Harbor, Mich.-based Whirlpool Corp. on June 5. On Oct. 5, the ITC agreed to continue with the remedy phase of the investigation.
Section 201 investigations are complex undertakings, since they require the ITC to review all known sources commercial washer imports under free trade agreements with the United States. Those countries included Australia, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Nicaragua, Panama, Peru, Singapore, and South Korea, or to imports from the beneficiary countries under the Caribbean Basin Economic Recovery Act. With the exception of South Korea, the rest of the countries were excluded from the remedy phase of the ITC investigation due to their negligible impact on the U.S. commercial washer market, the ITC said.
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