Trump’s Tale of Two Trade Cases: Samsung/LG Should Be Slammed, U.S. Solar Jobs Protected
Every child knows the basic rule that cheaters should never prosper, because if they do, there is no incentive to play by the rules.
The same holds true for trade deals. Trade deals have rules associated with them, and Samsung and LG have been found guilty three times since 2011 of violating the rules of the free trade agreement between South Korea and the United States (KORUS) when it comes to dumping washing machines onto the U.S. market.
The latest finding by the International Trade Court ruled that the two South Korean companies moved manufacturing operations to small, developing nations to avoid export restrictions built into KORUS.
The result of Samsung and LG’s dumping campaign is that the companies have moved from barely being on the chart to the numbers one and two positions in washing machine sales in the United States in 2016 at 18 and 16 percent of sales, respectively.
For their third violation of the trade-dumping rules in six years, the ITC has recommended that President Trump should put a 50% tariff on Samsung and LG washers as a penalty for their continual and systematic abuse of the KORUS agreement.
Meanwhile some in Congress are urging the president to go soft on the manufacturers as they each have announced plans to build washing machines in Tennessee and South Carolina now that they have cheated to gain a dominant position in the marketplace.
That would be a mistake.
In fact, the one way to ensure that the two rogue companies actually build manufacturing plants in the United States is to enforce the ITC import tariff penalty against them, as their domestically produced washing machines would not be subject to it, and encourage them to shift manufacturing to the United States to meet their ill-gotten market share.
With a decision likely in January, President Trump should enforce the full extent of the ITC sanctions against two companies that manipulated and abused the letter and spirit of the KORUS agreement and send a strong message that trade deals will be enforced.
While in the Samsung/LG washing machine case the ITC made the right decision, they shanked their recommendation in a solar panel case when the court found in favor of two solar companies: SolarWorld and Suniva.
SolarWorld is a German company whose major investor is the Qatar Foundation, an entity of the Qatari royal family. The Qatari investors would be the main beneficiaries of any decision benefiting Solar World.
Suniva is the other company asking for tariffs against foreign manufactured solar panels. This Chinese-owned company is controlled by a hedge fund based in Guernsey, an offshore tax haven. After benefiting from $48 million in federal taxpayer subsidies from Obama’s green investing scam, and even using prison labor to build their products, Suniva still went bust.