Despite U.S. Tariff Bomb

Samsung Electronics and LG Electronics have managed to minimize the damage from the U.S. government's safeguard measures on washing machine.

South Korea’s two major home appliance manufacturers – Samsung Electronics Co. and LG Electronics Inc. – are still favored by U.S. consumers despite the Trump administration’s “tariff bomb.”

According to U.S. market research firm Traqline and industry sources on October 29, Samsung Electronics ranked first with a 19.1 percent share of the U.S. washing machine market in the first half of this year. The company also maintained the lead in terms of overall home appliance sales for two years in a row with a 19.4 percent market share.

In addition, LG Electronics stayed in the second spot in the U.S. washing machine market with a 17.2 percent share. After the safeguard measures have implemented, LG Electronics’ share in the U.S. market rather showed an upward trend. The figure stood at 16.8 percent and 16 percent in the first quarter of 2017 and 2018, respectively, but increased 2.3 percentage points to 18.3 percent in the second quarter of 2018. The company also came in second in terms of overall home appliance market with a 16.7 percent share, up 1 percentage point from 2017.

The two Korean companies were chosen by U.S. consumers, though the U.S. imposed heavy tariffs on their products. In contrast, U.S.-based Whirlpool Corp., which aggressively pushed the U.S. government to levy safeguard tariffs, suffered a decline in operating profit. Whirlpool posted US$210 million (239.82 billion won) in operating profit in the third quarter this year, a 24 percent drop compared to the same period last year. The company showed an operating loss of US$350 million (403.13 billion won) until the third quarter.

The American industry said that a jump in material prices was the main cause of Whirlpool’s sluggish performance, but a drop in market share also is one of the reasons. Whirlpool had a 15.7 percent share in the washing machine market in the first half, down 0.6 percentage point from 16.3 percent a year earlier. Its share of the overall home appliance market also fell from 15.4 percent to 14.5 percent over the same period.

A safeguard is a trade barrier designed to regulate imports by raising tariffs or restricting imports. The U.S, government has taken a safeguard measure on washing machines from February 7. South Korean washing machine exporters are subject to a tariff of 50 percent starting from this month, as the tariff rate quota (TRQ) of 1.2 million units applied to South Korean washing machines has been recently used up.


Samsung Electronics and LG Electronics are struggling to minimize the damage from the safeguard measures. Earlier this year, the two companies announced plans to improve their market power in the U.S. with large-capacity premium products.

They have also made a change in the structure of production. For instance, Samsung Electronics started the operation of its washing machine plant in Newberry Country, South Carolina, in January, two months earlier than schedule, and secured supplies to the U.S. market. LG Electronics was scheduled to begin operation of its washing machine plant in Tennessee in the first quarter next year but has decided to advance the operation date to the fourth quarter of this year. An official from the industry said, “LG Electronics has increased its washing machine shipments to the U.S. from the end of last year in order to avoid the TRQ, and it is expected to supply the shortfall from the Changwon plant after its washing machine plant in the U.S. start operation in the fourth quarter this year.”

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