South Korean household electronics names Samsung Electronics and LG Electronics are busy building their case after the U.S. government announced preliminary anti-dumping finding and duties on their residential washing machines produced in China.

According to the preliminary report announced by the U.S. Department of Commerce on Wednesday, imports of Samsung Electronics’ washing machines produced by its Chinese entity Suzhou Samsung Electronics Co. have surged “over a relatively short period of time” and will be levied with 111 percent duties for selling at unfair price in the U.S. It also proposed punitive duty of 49 percent on washers of LG Electronics produced by its Chinese entity Nanjing LG-Panda Appliances Co.

The department launched an investigation into possible anti-dumping practice by Samsung and LG after their competitor Whirlpool Corp. filed a petition in December last year, alleging that the two Korean consumer electronics giants have sold washing machines from their Chinese factories at cheaper prices than actual production costs in a bid to expand their respective shares in the U.S. home appliances market.

In its preliminary report, the U.S. Department of Commerce said that it “will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits” based on the preliminary rates. If the finding is approved, Samsung Electronics would have to pay cash deposits for the shipment up to 90 days prior to the publication of the preliminary report.

The Commerce Department is scheduled to present a final report in December and determine jointly with the International Trade Commission in January next year whether U.S. manufacturers of washing machines were materially threatened by anti-dumping activities.

Korean consumer electronics manufacturers including Samsung and LG presume that the preliminary determination by the U.S. government is a result of Whirlpool’s steady move to keep industry rivals in check. In 2013, the U.S. home appliance manufacturer had also filed a petition to the U.S. government that washers under Samsung and LG label were suspected of dumping practice. The commerce department charged up to 13 percent anti-dumping penalties on the two Korean companies. But Samsung and LG filed a suit with the World Trade Organization against the U.S. government’s decision and in March this year, the WTO ruled in favor of the two companies, stating that the U.S. measure breaches WTO rules.

Samsung and LG expressed regret over the U.S. government’s latest preliminary determination and are expected to take active measures. Some sources from the home appliance industry note that the two companies may have been hit by the ongoing trade dispute between the U.S. and China, referring to the fact that Whirlpool also imports washing machines produced in China to the U.S. and that Samsung and LG washing machines are sold at higher prices than those of their rival’s products in the U.S.

By Song Sung-hoon and Park Eui-myung

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