Whirlpool alleges Samsung, LG rejigged product transfer prices to lower US tariffs

NEW YORK – Whirlpool Corp., the world’s top home appliances maker, has lodged a complaint with the White House, alleging that South Korea’s Samsung Electronics Co. and LG Electronics Inc. inappropriately lowered their transfer prices on appliances shipped to the US to reduce tariff bills.

The US home appliance giant alerted the White House and the Customs and Border Protection (CBP) in mid-August that the two Korean manufacturers improperly adjusted internal transfer prices on all of their imported home appliances, people familiar with the matter said on Tuesday.

Transfer prices govern how subsidiaries of a multinational enterprise account for transactions between one another, such as when Samsung’s Vietnam unit sells televisions to its US arm.

While US tax authorities allow some flexibility in transfer pricing, Whirlpool claimed Samsung and LG had gone beyond what is permitted to blunt the impact of US tariffs.

Both Samsung and LG denied any wrongdoing, stating that their pricing practices comply with Internal Revenue Service (IRS) guidelines.

LONG-RUNNING RIVALRY

The dispute revives a long-running rivalry in the US home appliances sector.

Samsung and LG controlled a combined 36% of the US home appliance market in the first quarter of this year, while Whirlpool commanded about 20%.

Whirlpool has repeatedly sought trade remedies against its Asian rivals, most notably in 2011 when it persuaded Washington to impose steep anti-dumping and countervailing duties on Korean-made washing machines.

Seoul challenged those measures with the World Trade Organization (WTO) and won in 2016, but the US maintained the duties.

Samsung and LG have since invested heavily in local production, with factories in South Carolina and Tennessee, respectively.

Yet Whirlpool’s latest complaint raises the prospect of renewed trade frictions in a market that tariffs have already reshaped.

SECOND ROUND OF PRODUCT TARIFFS IN THE WORKS

The case comes as the Trump administration prepares a second wave of tariff measures, heightening concerns among Asian exporters.

The US Department of Commerce this week began accepting applications from domestic companies seeking to have additional products levied with 50% duties, after an initial round in May targeted steel, aluminum and a wide range of manufactured goods.

In the first round, 407 of the 945 products requested by US companies, including refrigerators, washing machines, transformers and heavy equipment, were approved for high duties.

Analysts expect an even broader list by year-end, with industry groups warning that several of Korea’s core products exported to the US could be ensnared.

STEEL SECTOR AMONG HARDEST HIT

The steel sector has been especially aggressive.

Nucor Corp., the largest US steel producer, asked for tariffs on 223 products, of which 189 were granted.

Cleveland-Cliffs Inc., another big US steelmaker, saw all 14 of its requests accepted.

Those petitions swept in machine tools and transformers, key exports for Korean manufacturers such as DN Solutions Co., the world’s No. 3 machine tools maker, which now faces a 50% levy.

Trade lawyers said Whirlpool’s complaint, combined with the wider tariff push, signals that the US government seeks to maintain a hard line on imported consumer goods and industrial equipment, even as foreign manufacturers strengthen their US presence.

Write to Shin-Young Park and Jeong-Soo Hwang at nyusos@hankyung.com

In-Soo Nam edited this article.