Unfair Trade?
Peter Navarro, director of the U.S. National Trade Council (NTC), said at the National Association for Business Economics on March 6 that LG Electronics and Samsung Electronics are continuing their unfair trade activities by changing their product supply sources from China to Vietnam and Thailand in order to avoid anti-dumping duties and these trade cheating activities should be stopped right away. He went on to say that this causes thousands of Americans to lose their jobs and companies like Whirlpool to face significant losses.
His remarks are related to the 32% and 52% anti-dumping duties recently imposed on washing machines manufactured in China by the respective companies. After the measure, the companies began to export washing machines to the U.S. not from China but from Thailand and Vietnam.
Under the circumstances, South Korean manufacturers are concerned about how to change their overseas production strategy. Samsung Electronics is currently building a consumer electronics complex in the Saigon Hi-Tech Park in Vietnam and Samsung Display recently decided to make an investment of US$2.5 billion to expand its facilities in Vietnam. LG Electronics is planning to increase vehicle infotainment system production in Vietnam and LG Innotek is preparing to build camera module manufacturing facilities in the same country. Many other South Korean companies such as Hyosung are increasing their investment in the country as well to make use of it as their key production bases.
At the same time, they are trying to avoid pressure from the Donald Trump administration by investing in the United States. Early this month, LG Electronics decided to build a washing machine factory in Tennessee. Samsung Electronics is examining the feasibility of factory construction in Alabama and South Carolina. Hyundai Motor Company and Kia Motors are to invest US$3.1 billion until 2021.
At the National Association for Business Economics, the director of the U.S. National Trade Council continued to remark that the administration’s top-priority policy goal is trade deficit reduction and it is extremely important for national security. Last year, the United States posted a trade deficit of US$502.3 billion to reach a four-year high.