Press Release

The ITC Rules against American Workers and Consumers Again

In response to a petition Whirlpool filed in May under Section 201 of the Trade Act of 1974, the U.S. International Trade Commission (ITC) determined that the manufacturer of large residential washers (LRWs) experienced serious injury from competition from Korean LRW manufacturers LG and Samsung. Section 201 is a remedy for domestic industries seriously injured by or threatened with serious injury by increased imports to request import relief. This was a rarely used action, however, in 2017 two Section 201 suits have been brought – both meritless. You may access the ALEC statement on the earlier case brought by Suniva and SolarWorld here.

According to Whirlpool’s ITC petition, its “domestic industry [has] suffered significant market share loss, deteriorating financial performance, low and declining capacity utilization, and suppressed investment and employment.” However, there is ample evidence that the company is thriving, including market share that is comparable to LG’s and Samsung’s and increased net sales and revenues.

Theoretical free market arguments aside, this decision has real-world consequences that may harm hardworking American workers and consumers. Foreign Direct Investment (FDI) creates American jobs. However, unfairly targeting foreign businesses with barriers to entry reduces U.S. attractiveness to foreign investment, which is what happened the last time a President invoked Section 201 remedies in 2002. Thirty percent tariffs were imposed on steel imports to devastating effect resulting in the elimination of 200,000 American jobs with minimal benefit to U.S. steel producers.

The Whirlpool decision may also sacrifice jobs. Samsung and LG have announced plans to open facilities in SC, TN, NJ and MI that are likely to produce almost 2,000 American jobs – many in the manufacturing sector. For consumers, ITC-proposed remedies translate into higher LRW prices and fewer choices.

The ITC will offer recommendations to the White House for remedies in this case in the coming weeks. ALEC opposes the ITC’s ruling as protectionism that will ultimately harm the U.S. economy and cost American jobs and urges the President, who will make the final determination on whether to accept or reject the ITC’s recommendations, to choose free market principles over protectionism. Strong leadership is needed to stop special interests from misusing U.S. trade law to gain an unfair advantage over foreign competitors and to help end the recent proliferation of meritless Section 201 cases.

Karla Jones, the Director of the ALEC Task Force on International Relations and Federalism weighed in on the discussion in an article that appeared in The Hill that can be accessed here.

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