SEOUL • South Korea said yesterday that it will complain to the World Trade Organisation (WTO) about a US decision to impose tariffs on imported washing machines and solar panels, calling the action excessive and regrettable.
"The United States has opted for measures that put political considerations ahead of international standards," South Korean Trade Minister Kim Hyun Chong said in a meeting with industry officials. "The government will actively respond to the spread of protectionist measures to defend national interests."
China yesterday hinted that it could take a similar approach.
"With regard to the wrong measures taken by the United States, China will work with other WTO members to resolutely defend our legitimate interests," its Ministry of Commerce said in a statement.
The Chinese ministry said it expressed strong dissatisfaction regarding the US tariffs, adding that the US decision further deteriorates the global trade environment.
US President Donald Trump imposed steep tariffs on imported washing machines and solar panels on Monday, dealing a blow to South Korea's Samsung Electronics and LG Electronics.
The decisions in the two Section 201 safeguard cases came after the US International Trade Commission (ITC) found that both imported products were "a substantial cause of serious injury to domestic manufacturers".
The tariffs being imposed on washing machines exceeded the harshest recommendations by ITC members, while the solar tariffs were lower than domestic producers had hoped for.
Mr Trump ignored a recommendation from the ITC to exclude South Korean-produced washing machines from LG from the tariffs.
The US will impose a 20 per cent tariff on the first 1.2 million imported large residential washers in the first year, and a 50 per cent tariff on machines above that number. The tariffs decline to 16 per cent and 40 per cent, respectively, in the third year.
A 30 per cent tariff will be imposed on imported solar cells and modules in the first year, with the tariffs declining to 15 per cent by the fourth year. The tariff allows 2.5 gigawatts of unassembled solar cells to be imported tariff-free in each year.
Analysts say the targeted companies can get around the import duty by raising prices or re-routing production to countries exempt from the new taxes.
"They can pass on cost increases to consumers or ship the parts into the US or neighbouring countries for final assembly to avoid the tariffs," said Yuanta Securities analyst Juliette Liu.
LG is building a washing machine factory in Tennessee, with completion possible early next year. Samsung's home appliances plant in South Carolina could produce one million washing machines this year.
REUTERS, NYTIMES, BLOOMBERG