LG Electronics told retailers Wednesday to expect price hikes on its washing machines thanks to President Donald Trump's decision to implement steep taxes on the South Korean company's appliances.
"As a result of the trade situation, we will be initiating pricing actions, which will be sent under separate cover shortly," Thomas Yoon, executive vice president at LG, told retail partners in a memo. "We have developed supply-chain plans to help assure a continuous supply of the best quality, most reliable laundry products on the market for your customers."
The Trump administration announced Monday it will impose a 20 percent tariff on the first 1.2 million imported large residential washing machines in the first year and a 50 percent tariff on machines above that number. The protective taxes will dissipate over three years.
The president also introduced tariffs on imported solar panels.
The impending price increases were largely expected across Wall Street, with Goldman Sachs predicting that the protectionist policy could send the cost of a new washing machine 8 percent to 20 percent higher. The tariff also includes a tax on machine parts, which could drive some costs higher for domestic manufacturers as well.
The Wall Street Journal, which first reported the memo, said that industry experts predict that LG will raise retail prices on some of its models by roughly $50.
"We are very disappointed in this misguided decision, which far exceeds what the expert agency recommended," said LG on Tuesday. "This is a textbook case about how certain companies can game the process to use trade laws to try to accomplish what they can't accomplish in the marketplace."
The move is being praised by U.S.-based appliance manufacturer Whirlpool, which has long lobbied for more protective measures against its Asian rivals.
"This is a victory for American workers and consumers alike," Whirlpool Chairman Jeff Fettig said in a press release Monday. "This announcement caps nearly a decade of litigation and will result in new manufacturing jobs."
Shares of Whirlpool were up 3.6 percent Wednesday, adding to a week-to-date gain of more than 6 percent.