I recently had the pleasure of testifying in front of the International Trade Commission in defense of free trade, the American consumers, and all American workers. The numerous benefits of free trade have helped producers establish more efficient supply chains that lead to the creation of jobs not just in the 5th District of South Carolina, but all over America. Access to cheaper parts and products from abroad and at home provides necessary and robust competition for a healthy economy.
For instance, Samsung recently announced plans to invest $380 million in a washer and microwave manufacturing facility in Newberry County, scheduled to open in early 2018. The decision to open in Newberry came because this Korean company realized how much money can be saved this way overproducing certain parts overseas.
By 2020, this plant is expected to bring 954 jobs to our communities and greatly boost our local economy. In fact, Samsung is expected to become the second-largest employer in all of Newberry County.
In my testimony to the ITC, I opposed trade remedies petitioned by Whirlpool against companies such as Samsung and LG. Whirlpool alleges that by importing products and parts from other countries, where they can be produced at a lower cost, Samsung is harming U.S. manufacturers and companies. The petition, commonly known as a “safeguards case,” was filed using Section 201 of the International Trade Act of 1974.
Some of the remedies requested under this petition could potentially include blocking all imports of “large residential washers” as well as specific parts. In the past, Whirlpool has successfully pursued anti-dumping verdicts against Samsung and LG for manufacturing their products in Mexico, South Korea, and China.
Interestingly, in 2006, when Whirlpool merged with Maytag, the company specifically cited LG and Samsung as sources of healthy international competition that should allay any fears they would form a monopoly. This is how they justified their merger, even though Maytag and Whirlpool together had roughly 70 percent share in the washer and dryer markets.
This petition in front of the ITC represents exactly the kind of special-interest policies that the United States government should avoid. It seeks to limit market access and restrict supply chains, which would cause average Americans to lose the ability to purchase cheaper, more sophisticated washing machines. The result of this price increase means better business for Whirlpool, which could but does not take advantage of these international supply chains that could lower their costs.
Government intervention in matters of trade should only occur if there is a direct and demonstrated harm to American consumers. The government has no business in picking winners and losers. Tariffs and bans on imports cause price increases across the board. They can even cost consumers the choices they would otherwise have in the markets they are attempting to defend. Often, trade restrictions have a negative impact instead of the intended positive results.
In this case, Whirlpool has a problem with the establishment of overseas supply chains for producing higher-end washers at a lower cost. Whirlpool sees Samsung and LG as causing injury to the U.S. washer industry. However, the remedies they are seeking would have a direct devastating impact on American consumers and producers. With restricted overseas supply chains, consumers would be faced with higher prices for “large residential washers” here at home.
Samsung’s recent plan to invest in South Carolina would also be threatened by these trade remedies. They could cost almost 1,000 jobs in my district.
Unlike Whirlpool, Samsung does not intend to produce all the essential pieces for their washers here in the U.S. The Newberry plant would be dependent on the ability to import cheaper parts from abroad and assemble them all right here. The savings from these parts and their assembly here in America would be passed on directly to the consumers. A ban on large residential washer imports and their parts would not make it possible to have this plant in my district.
Rep. Ralph Norman, a Republican, represents the 5th District of South Carolina. He serves on the House Small Business Committee and House Committee on Science, Space, and Technology.
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