On Tuesday, January 23, 2018, President Trump signed the Presidential Proclamation to Facilitate Adjustment to Competition from Imports of Large Residential Washers, thereby announcing the President’s decision regarding the investigation of large residential washers (LRWs) under Section 201 of the Trade Act of 1974 (the LRW Safeguard Investigation). A copy of the Proclamation can be found here.
The investigation was brought by petitioner Whirlpool Corporation in May 2017 and was instituted by the U.S. International Trade Commission in June. The President made his determination based on recommendations from the U.S. International Trade Commission (ITC) and chose to take action by applying the following additional duties to LRWs and certain parts:
|
Tariff-Rate Quotas on Washers |
|
|
Year 1 |
Year 2 |
Year 3 |
|
First 1.2 million units of imported finished washers |
20% |
18% |
16% |
|
All subsequent imports of finished washers |
50% |
45% |
40% |
|
Tariff of covered parts |
50% |
45% |
40% |
|
Covered parts excluded from tariff |
50,000 units |
70,000 units |
90,000 units |
A more precise definition of LRWs and parts covered under the investigation can be found in the ITC’s Notice of institution of investigation (82 Fed. Reg. 27075 (June 13, 2017) (and we believe the Annex referenced in the Proclamation, which Annex has yet to be published).
Countries excluded from the safeguard tariffs are Canada and (with the exception of Thailand) Generalized System of Preferences (GSP) beneficiary countries that account for less than 3 percent of total U.S. imports (provided these countries collectively do not account for more than 9 percent of total U.S. imports) of the subject goods. Thailand, despite being a GSP country, accounts for more than 3 percent of total U.S. imports of the subject goods and therefore will be included in the safeguard measures.
GSP eligibility is reviewed annually for a number of purposes. As such, there is no certainty that a country will remain GSP eligible throughout the time period of the safeguards. Also, the Proclamation indicates that the excluded countries will be modified in the event of a surge in imports from any such country. Furthermore, the Proclamation provides that if the out-of-quota quantity of parts increases “by an unjustifiable amount” and “undermines the effectiveness of the safeguard measures” then the tariff-rate quota on such parts may be modified to a level considered “appropriate.”
Canada and various GSP countries aside, imports from Free Trade Agreement countries, including Korea and Mexico, are covered under the safeguard measures.
The safeguard measures will become effective 12:01 am, Eastern Standard Time, February 7, 2018.
Significantly, the Proclamation does not state how scope exclusion requests will be handled. As opposed to the other safeguard proclamation issued January 23rd (on solar cells) there is no provision in the LRW Proclamation for a procedure on exclusion requests. Informal discussions with government authorities indicate that scope exclusion requests may be handled by the Department of Commerce. However, the Proclamation also identifies the goods by tariff numbers, and tariff classification is under the jurisdiction of customs and Border Protection. We intend to provide more information on LRW exclusion requests shortly.
