— This is the script of CNBC's news report for China's CCTV on October 5, Thursday.
The US International Trade Commission, voting 4-0 unanimously in favor of a finding that the large number of washing machine imports were hurting domestic manufacturers. This means apart from the Canadian lumber, aircraft manufacturing, solar panels and other industries, a potential trade war has now spread to a new market: the washing machine market. It is expected that United States will implement various protectionist measures such as tariffs or quotas on Samsung, LG and other foreign companies.
Started with an appeal from the U.S Appliance giant Whirlpool Corp complaining that South Korean rivals Samsung, LG and other imported products were unfairly competing in the US market by lowering their prices and so on. Therefore, Whirlpool hopes that the US government can implement some trade protectionism measures.
Firstly, let's put aside what Samsung, LG and other multinational groups have done and look instead at the market share alone. From this alone, we can see that Whirlpool's washing machine market share has been taken over by the former, in recent years. According TraQline, Whirlpool's market share was at 40% in 2012, but it fell to 35% at the end of last year. On the contrary, Samsung and LG's combined market share in 2007 was only 11%, but this figure climbed to 22% four years ago and at the end of last year, it rapidly grew to 35%.
Therefore, Samsung and LG are now comparable to Whirlpool. During the US International Trade Commission hearing last month, Samsung's Senior Vice President John Herrington commented about this intense competition. He said that the shrinking of Whirlpool's market share and sales is not due to unfair competition from foreign brands but more because of how Whirlpool's products were not able to keep innovating to meet the taste and requirements of the American consumers.
He also added that consumers are now turning to better designs, more practical and innovative washing machines while Whirlpool failed to keep up its innovation. Whirlpool refuted this statement, and said that in recent years, Whirlpool washing machines products have taken steps to be innovative. Indeed, it also should be noted that the Commission's decision is not final.
Following this, there will be a public hearing on October 19. The Commission will recommend remedies to President Trump on December 4 this year and Trump is expected to make the final decision early next year.
As for the market, due to concerns about the rise in trade barriers, as well as the uncertainty brought about by trade war, Whirlpool's stock price fell overnight after the first rise, and finally falling by 1.28%.
We will continue to keep watching on this situation.
CNBC's Chen Qian reporting from Singapore.