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Tariffs could affect Samsung’s Newberry plant

Staff Report //January 23, 2018//

Tariffs could affect Samsung’s Newberry plant

Staff Report //January 23, 2018//

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President Donald Trump levied tariffs on Samsung and LG washing machines on Monday that could affect operations at Samsung’s newly opened manufacturing plant in Newberry. 

The first 1.2 million washing machines imported in the first year of the tariff will face a 20% tax, with additional imports facing a 50% tax. Washing machine parts will also be subject to a 50% tax. 

The tariffs decline to 18% for the first 1.2 million imports in the second year with a 45% tax on additional washers and covered parts, and to 16% and 40% in the third and final year.

The tariff announcement “is a great loss for American consumers and workers,” Samsung said in a statement. “This tariff is a tax on every consumer who wants to buy a washing machine. Everyone will pay more, with fewer choices.”

Trump also levied tariffs on imported solar panels.

Samsung celebrated the grand opening of its first U.S. home appliance manufacturing facility in Newberry on Jan. 12. The $380 million plant has already begun producing washing machines, and Samsung expects to hire 954 workers there by 2020. 

S.C. Gov. Henry McMaster told a gathering of state business leaders on Tuesday that he has spoken to Samsung representatives and assured the company the state is committed to protecting the manufacturer’s investment.

“They are analyzing the entire situation and are disappointed like we are,” McMaster said during the annual S.C. Chamber of Commerce’s Business Speaks at the Statehouse event. “We’ll work with (Samsung) to make sure the investment is strong.”

U.S. Rep. Ralph Norman, who represents South Carolina's 5th Congressional District, and other elected officials lobbied against the tariffs before the International Trade Commission in November. The ITC found Samsung violated anti-dumping regulations by producing washing machines overseas and importing them to the U.S. at artificially low prices.

“Samsung greatly appreciates the support of the many South Carolina and other officials who have advocated on our behalf,” the company said. “We already have hired more than 600 U.S. workers at our new South Carolina factory, and we began U.S. production of our high-quality washing machines on Jan. 12. Consumers are choosing Samsung premium washing machines for their innovation and design.”

The tariffs are a response to a petition from Whirlpool, which complained about the low-cost competition from rivals Samsung and LG. Some American manufacturers say the measures are necessary to protect their sales.

"The president's action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers and businesses," U.S. Trade Representative Robert E. Lighthizer said in a statement

Samsung, which announced the Newberry facility last June, had said it plans to produce 1 million washing machines at the plant in 2018. Samsung renovated the former Caterpillar plant that closed in April 2016, resulting in the loss of 325 jobs. More than 800 full-time and contract workers added 151,00 square feet to the 450,00-square-foot facility, installing two manufacturing and assembly lines with 20 presses and 30 injection molding machines.  

John Harrington, general manager of home appliances at Samsung Electronics America, told the ITC that the tariffs would affect sales of washing machines and the success of the Newberry plant.

Even though the company intends to supply most of its local market needs from the S.C. facility, Harrington said, “We can’t supply all of those needs immediately in January. We will need to import washers so that we can supply a full range of products to our retailers and consumers during the ramp-up period.

“If we are unable to offer our full range of products to retailers and consumers, we will lose floor space and sales, impacting the success of our South Carolina operation. So the ultimate impact of the proposed tariff is a lose-lose scenario for U.S. production, U.S. employers and U.S. consumers.”

The solar effect

Solar panel tariffs will be 30% in the first year, gradually falling to half that in four years. Solar companies Suniva and SolarWorld sought government action to protect what is largely still a burgeoning U.S. industry.

The top two solar panel manufacturers in the world are Chinese companies, according to energy website  

The Solar Energy Industries Association expressed disappointment with Trump’s decision, which it said will cause the loss of around 23,000 U.S. jobs and result in the delay or cancelation of billions of dollars in solar investments.

“While tariffs in this case will not create adequate cell or module manufacturing to meet U.S. demand, or keep foreign-owned Suniva and SolarWorld afloat, they will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs,” said Abigail Ross Hopper, SEIA president and CEO, in a statement.

Solar has been on the rise in South Carolina. In October, S.C. Electric & Gas connected the Otarre Solar Park to its electric system, adding 1.62 megawatts of utility-scale solar power to its grid. The eight-acre park in Cayce features 6,156 panels, enough to power approximately 320 homes.

Dominion Energy, a Virginia-based company bidding to acquire Cayce-based SCANA, recently launched two solar farms in Jasper County. The 71.4-megawatt Solvay Solar Energy facility entered service at the end of 2017, bringing the Richmond, Virginia-based company’s total addition of clean energy to South Carolina’s electric grid to 81 megawatts.

It joined the 10-megawatt Ridgeland Solar project, which began operation last May. Those farms contributed to Dominion’s total of 1,350 megawatts of solar energy in service, under construction or in development — the sixth-largest total among U.S. electric utilities.

“Solar is a large part of our portfolio of power,” McMaster said. “We need nuclear, we need solar, we need power if we’re going to continue to grow in South Carolina. (Solar) can’t flourish unless we have access to the cells, which are made overseas.”