LG Electronics Inc. will increase its prices for most of the washing machines it sells in the United States, said the South Korea based company Wednesday, in response to the steep tariffs the White House administration placed on large residential washers.
The new tariffs will affect the majority of top- and front-load washers, said LG in a letter addressed to retailers, without saying the amount of the price hikes it will place on the washing machines.
On Monday, President Donald Trump gave his approval of recommendations for imposing tough tariffs on imported washing machines, following the findings of the International Trade Commission that the imports were a cause of injury to domestic makers of washing machines.
A tariff of 20% applies to the first 1.2 million washing machines imported the first year, while a 50% tariff will be placed on machines that exceed that number.
The recommendations by the ITC to protect the appliance makers in the U.S. such as Whirlpool Corp. were announced in November as a way from preventing LG and Samsung Electronics from flooding the market in the U.S. with less expensive washing machines.
Trump did not take into consideration a recommendation the ITC gave to exclude washing machines produced in South Korea by LG from the new tariffs, as anti-dumping duties placed prior on the machines were dropped.
Anticipating the move, LG has built a factory to build washing machines in Tennessee that will start production as soon as late 2018, and Samsung recently started production of washing machines at a South Carolina plant.
The expected price hike of LG washing machines made outside the U.S. will likely be no more than $50, as most of the tariff will be borne by the manufacturers and not the consumers.
One industry analyst believes that if someone wants an LG washing machine that was built in South Korea bad enough they will pay the additional cost and added that LG and Samsung were planning for this to happen and the plants they have in the U.S. would be mitigating the hit from the new tariff.
A spokesperson from LG said that nothing was decided yet on when the new price hike would be made or the amount the washing machine price would increase.
On Monday LG said it was disappointed the tariff was placed on its washers and called the decision misguided.