Samsung: Tariffs Drive Up Costs Of Appliances

A Samsung Electronics America spokeswoman said the continued tariffs on foreign-made washing machines and parts imported to the United States have been a challenge for the company’s new manufacturing operation in Newberry County.

The South Korea-based appliance manufacturer opened its S.C. washing machine plant in January — the company’s first home appliance manufacturing facility in the United States.

President Donald Trump levied tariffs in January on imported washing machines and parts, affecting Samsung and LG after both companies had announced plans or started producing home appliances in the United States.

For the first year of the tariff, a 20 percent tariff will be put on the first 1.2 million washing machines imported and a 50 percent tax will be levied for additional washing machine parts imported. In the second year, tariffs on washing machines decline to 18 percent, with parts being taxed at 45 percent.

While Samsung does produce appliances in the United States now, it continues to import parts and washing machines for North American customers as it ramps up production at its S.C. plant.

Megan Pollock, Samsung’s vice president of strategic communications, said Tuesday during the S.C. Manufacturing Conference and Expo in Greenville that the company is against the tariffs.

“It has been impactful. … We truly see the tariffs on washing machines as a tax on everyone who would purchase a machine, whether from us or not,” Pollock said. “Prices are going up across the board. … It is concerning to us.”

The Trump administration has said the tariffs help even the playing field for U.S. manufacturers against overseas companies and plants, who often have a cost advantage from importing parts or finished products.

Other S.C. manufacturers that rely on global supply chains have said they are not in favor of tariffs. Many large manufacturers with S.C. operations import parts from plants overseas, including Boeing, Mercedes-Benz Vans, Volvo and BMW, to name a few. Automakers typically import and export parts and finished vehicles to meet global customer demand.

Volvo executives came out strongly against the tariffs earlier this summer during the unveiling of the new S.C.-made S60 sedan, saying that the company’s business model relies on free and open trade and the ability to import parts from overseas and export U.S.-made vehicles.

Pollock said that despite the taxes, there are no plans to relocate Samsung’s S.C. operations.

Samsung began commercial production at its new plant in January after it invested $380 million to expand Caterpillar’s former building; Caterpillar shuttered operations there in April 2016, laying off around 350 people.

Samsung added 1.2 million square feet to the existing facility for a total of more than 1.6 million square feet.

Within 6 months of moving into the building in summer 2017, Samsung began producing front-loading washing machines at the plant. Two production lines run the length of the plant.

Samsung employs 650 people, with 90 percent of them based in Newberry County and surrounding communities. By 2020, the plant is expected to employ 1,000 workers. – GSA Business

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