Why Vietnam Is Spinning Atop Global Washing-Machine Market

(Bloomberg) -- To understand why President Donald Trump slapped a global tariff on washing machine imports rather than singling out offending countries, it helps to follow the years-long cat-and-mouse game between U.S. officials and South Korean manufacturers LG Electronics and Samsung Electronics.

In 2011, U.S. rival Whirlpool Corp. accused the two Asian companies of dumping machines made in South Korea and Mexico. After the Commerce Department instituted anti-dumping duties in 2013, much of the work shifted to China, according to a fact sheet from the U.S. Trade Representative.

When a fresh U.S. anti-dumping order targeted China in 2015, it was time to move on to Vietnam and Thailand, which in the past two years have become, respectively, the biggest exporters of washing machines into the U.S.

While the measures are aimed mostly at LG and Samsung, producers in other countries will be affected too. Germany’s BSH, which sells appliances under the Siemens and Bosch brand names, makes its washers for the U.S. market in Germany and Poland, according to a spokesperson. Swedish company Electrolux, which manufactures in Mexico for the U.S., will not be impacted by the decision, as it excludes machines with certain technical specifications, spokesman Daniel Frykholm said in an email.

Samsung, meanwhile, has opened a U.S. factory, while LG is building one. “It’s a very big industry, and you’re going to have a lot of plants built in the United States that were thinking of coming, but they would’ve never come unless we did this,” Trump said after signing the proclamation on Tuesday.

Germany’s electrical industry association was sharply critical. The tariffs “could trigger a downward spiral that ends up with only losers,” the group said. “This cannot be in the interests of the industry or the consumer.”

--With assistance from Jennifer Jacobs and Hanna Hoikkala

To contact the reporter on this story: Oliver Sachgau in Munich at osachgau@bloomberg.net.

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Elisabeth Behrmann

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