Whirlpool's Latest Anti-Consumer Rent-Seeking Attempt to Use Government Force to Raise Prices

Below is a slightly revised Saturday WSJ article about Whirlpool's latest rent-seeking attempt to use the coercive power of the U.S. government to protect itself from its more efficient foreign rivals (appliance makers) in South Korea.  To paraphrase H.L. Mencken, trade policy is frequently like two foxes (domestic producers like Whirlpool and the U.S. government) and a chicken (consumers) taking a vote on what to eat for lunch. These revisions reflect the voice of the millions of unorganized consumers, whose views are generally disregarded when trade policy is decided. 

"Whirlpool Corp., battered by price competition on home appliances, asked the U.S. government Friday to impose duties on imports of taxes and higher prices on American consumers who purchase residential washing machines made by South Korean rivals Samsung Electronics Co. and LG Electronics Inc.

This marks the second time in 2011 that Whirlpool has sought to use U.S. trade laws engaged in rent-seeking to protect itself from more efficient imports foreign rivals by imposing higher prices on Americans who purchase appliances for their homes. In March, the company asked its government enablers for duties on to impose higher prices on every American who decides to purchase an imported refrigerators.

Whirlpool, based in Benton Harbor, Mich., and the world's biggest maker of appliances, in its latest trade rent-seeking move for trade protection against its foreign rivals accused the two Korean companies of "dumping" selling washers made in Korea and Mexico into the U.S. market at prices below their production costs. Whirlpool also said its rivals benefit from various Korean government subsidies.  Based on their purchasing decisions, American consumers have overwhelming expressed their support for low-cost washers from Korea, and they have benefited collectively by saving millions of dollars.  And to the extent that Korean taxpayers have subsidized washers sold in the U.S., some consumers have expressed their gratitude to the Koreans for the generous foreign aid they have provided to American households during these tough economic times.

Because it’s been unable to compete effectively against lower-cost rivals, Whirlpool now needs the coercive power of the government to do what it can to defend protect itself from increasingly tough Korean competition amid sluggish U.S. demand, said David MacGregor, an analyst at Longbow Research in Cleveland.

LG and Samsung sold tens of thousands of washers at deep discounts, sometimes as much as 50%, during the recent Black Friday sales period, Whirlpool said. Whirlpool tried to limit its Black Friday promotions this year and ended up losing market share.  Partly because its recent marketing strategy failed, the company decided to seek protectionist trade policies that would coercively increase Whirlpool’s market share for washing machines with government force.
 
In its earlier trade case filed in March, Whirlpool sought import duties on government force to impose a tax on every American who purchases a premium-priced refrigerators with the freezer section at the bottom, made by the same Korean companies in Korea and Mexico. The U.S. Commerce Department in October said in a preliminary finding that duties taxes of as much as about 37% could be applied imposed on Americans who purchase those refrigerators, subject to further government reviews that would not consider the negative effects of higher prices on thousands of U.S. consumers.

Whirlpool makes washers under the Whirlpool, Maytag, Roper, Estate, Admiral, Amana, and Crosley brands in the U.S., and also makes store-brand washers for some retailers. Whirlpool said it believes it accounts for 95% of all large residential washers made in the U.S., but would like to further increase its washer market share towards 100% with government assistance, i.e. crony capitalism."