ITC Begins Section 201 Safeguard Investigation on Large Residential Washers

Any safeguard duties imposed as a result of this investigation would come on top of existing antidumping and countervailing duties on large residential washers from Mexico and South Korea imposed in 2013, and on China in 2017. The scope of investigation requested by Whirlpool mirrors the scope of the AD duty order on large residential washers from China, but is not country-specific.

According to the petition, Samsung and LG “have waged a relentless assault on U.S. manufacturers of large residential washers (LRWs) and the thousands of American workers they employ.” As AD/CV duties were imposed on large residential washers from South Korea and Mexico, Samsung and LG shifted production to China. Then, as cash deposits were imposed on large residential washers from China, production was shifted to Thailand and Vietnam, Whirlpool said. "For more than five years, Samsung and LG have pursued a strategy of dumping LRWs into the United States, and then doing an end-run around the U.S. antidumping laws that are intended to remedy such behavior," it said.

Petition Requests TRQ for Three Years

The tariff-rate quota (TRQ) requested by Whirlpool would allow "a base level of large residential washer imports to enter the U.S. without safeguard tariffs, “while at the same time ensuring that the domestic industry would not experience further injury due to additional surges in [large residential washer] imports.” Volumes would be allocated by country based on historical import levels for each respective country during a given period, for example from 2012 to 2016. For over-quota volumes, "tariffs may be assessed at a rate that addresses Samsung’s and LG’s injurious behavior," and the AD rates determined by the Commerce Department “may serve as one point of reference," the petition said.

The proposed TRQ "will not apply to various countries based on their preferential trade status, so long as imports from any such country have not contributed significantly to the domestic industry’s injury," the petition said. Though safeguard investigations are not country-specific, and duties would apply to all countries, ITC commissioners who find injury to U.S. industry must make additional separate injury findings for certain countries with which the U.S. has free trade agreements, the ITC has said (here). “These include the NAFTA countries (Canada and Mexico), Jordan, Australia, Colombia, Korea, Panama, Peru, Singapore, the CAFTA-DR countries, and Israel,” it said.

Whirlpool asks that the proposed TRQ last for three years, which is less than the four years (extendable to eight) provided for under Section 201. “A remedy of this duration should permit U.S. washer producers to realize adequate returns on their substantial investments and implement adjustment plans to support their future competitiveness," the petition said. "Whirlpool is also open to potential exclusions of specialty products if it can be established that such products do not compete with domestically-produced[large residential washers]," it said.

Revised Scope of Safeguard Investigation

According to the ITC’s initiation notice, the scope of the safeguard duty investigation is as follows:

The articles covered by this investigation are all LRWs and certain parts thereof. For purposes of this petition, the term LRWs denotes all automatic clothes washing machines, regardless of the orientation of the rotational axis, with a cabinet width (measured from its widest point) of at least 24.5 inches (62.23 cm) and no more than 32.0 inches (81.28 cm), except as noted below.

Also covered are certain parts used in large residential washers, namely: (1) all cabinets, or portions thereof, designed for use in large residential washers; (2) all assembled tubs designed for use in large residential washers which incorporate, at a minimum: (a) a tub; and (b) a seal; (3) all assembled baskets designed for use in large residential washers which incorporate, at a minimum: (a) a side wrapper; (b) a base; and (c) a drive hub; and (4) any combination of the foregoing parts or subassemblies.

Excluded from the scope are stacked washer-dryers and commercial washers. The term “stacked washer-dryers” denotes distinct washing and drying machines that are built on a unitary frame and share a common console that controls both the washer and the dryer. The term “commercial washer” denotes an automatic clothes washing machine designed for the “pay per use” segment meeting either of the following two definitions:

(1) (a) it contains payment system electronics; (b) it is configured with an externally mounted steel frame at least six inches high that is designed to house a coin/token operated payment system (whether or not the actual coin/token operated payment system is installed at the time of importation); (c) it contains a push button user interface with a maximum of six manually selectable wash cycle settings, with no ability of the end user to otherwise modify water temperature, water level, or spin speed for a selected wash cycle setting; and (d) the console containing the user interface is made of steel and is assembled with security fasteners; or

(2) (a) it contains payment system electronics; (b) the payment system electronics are enabled (whether or not the payment acceptance device has been installed at the time of importation) such that, in normal operation, the unit cannot begin a wash cycle without first receiving a signal from a bona fide payment acceptance device such as an electronic credit card reader; (c) it contains a push button user interface with a maximum of six manually selectable wash cycle settings, with no ability of the end user to otherwise modify water temperature, water level, or spin speed for a selected wash cycle setting; and (d) the console containing the user interface is made of steel and is assembled with security fasteners.

Also excluded from the scope are automatic clothes washing machines that meet all of the following conditions: (1) have a vertical rotational axis; (2) are top loading; (3) have a drive train consisting, inter alia, of (a) a permanent split capacitor (PSC) motor, (b) a belt drive, and (c) a flat wrap spring clutch.

Also excluded from the scope are automatic clothes washing machines that meet all of the following conditions: (1) have a horizontal rotational axis; (2) are front loading; and (3) have a drive train consisting, inter alia, of (a) a controlled induction motor (CIM), and (b) a belt drive.

Also excluded from the scope are automatic clothes washing machines that meet all of the following conditions: (1) have a horizontal rotational axis; (2) are front loading; and (3) have cabinet width (measured from its widest point) of more than 28.5 inches (72.39 cm).

For Customs purposes, the LRWs covered by the investigation are provided for under Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 8450.20.00. LRWs and certain parts thereof subject to this petition may also be imported under HTSUS subheadings 8450.11.00, 8450.90.20 and 8450.90.60. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise subject to this petition is dispositive.

ITC Says Investigation ‘Extraordinarily Complicated,’ Extends Deadlines

After finding the investigation is “extraordinarily complicated” by various issues, including the existing AD/CVD orders, the ITC says it will take an additional two days to make its injury determination. The ITC will issue its injury determination by Oct. 5, 2017, it said. The commission will submit its final report to the president by Dec. 4, 2017, it said.

ITC to Hold Hearings on Injury, Remedy

Interested parties that want to participate in the investigation must file an entry of appearance within 21 days after the ITC publishes its initiation notice in the Federal Register, i.e., on or about July 4. The commission will hold two separate hearings in connection with the injury and remedy phases of the investigation, it said. A hearing on injury will be held on Sept. 7. If the ITC finds injury, it will hold another hearing on Oct. 19 on what remedies should be imposed. Requests to appear are due Aug. 31 and Oct. 13, respectively. Non-parties to the investigation will be allowed only a short statement. Written comments from interested parties on injury are due Aug. 29, and briefs on remedy are due Oct. 12. Post-hearing briefs on injury are due Sept. 14, and post-hearing comments on remedy are due Oct. 26.

(Federal Register 06/13/17)