President Trump announced on Monday trade tariffs aimed at protecting the U.S. washing machine industry, at the behest of Whirlpool.
Problem is, South Korea's Samsung and LG saw this coming. In fact, this is not a new story.
This is global manufacturing Whac-A-Mole.
Although South Korea ranked No. 1 for washing machine imports into the United States from 2007 through 2012, after supplanting longtime No. 1 Germany, it no longer does.
And although China ranked No. 1 from 2013 through 2017, after supplanting South Korea, it no longer does.
Today, Vietnam accounts for almost one-third of all imports into the United States, after supplanting China.
In fact, that has been one of the complaints of Whirlpool, which has for years decried what its views as unfair competitive practices carried out by Samsung and LG, and sought remedies.
While washing machines are not a top-ranked U.S. import -- ranking No. 196 among more than 1,200 categories -- they are not an insignificant one either, with annual imports up 10% through the first 11 months of 2017, the latest data available, to a record $1.71 billion.
Although trade disputes are often viewed as between countries, and not just by the Trump Administration but by people across the land, they are often, as Whirlpool knows all too well, not about countries at all. They are often about companies. Big companies. Big global companies. Big global companies with global footprints.
That includes Whirlpool. The image that trade's detractors would like burnished into your cranium is of poor, laid-off Midwestern workers, who after toiling for a lifetime in the plant just like their fathers and grandfathers before them, punching the clock for an honest, middle-class existence and the eventual gold watch, find themselves cast aside like, well, an old rusty washing machine.
Certainly there's truth in that image.
Indeed, Whirlpool has nine manufacturing facilities in the United States, with five of those in Ohio, according to its website. The U.S. Senate's poster child for anti-trade sentiment is Ohio Democrat Sherrod Brown, who often finds himself in lockstep on trade with Trump, his nemesis on so many other issues.
And the data plays into the image as well. While overall U.S. imports have increased about 86% since 2003, imports of washing machines have increased more than 317% -- almost four times as rapidly. It's fair to say that's not because Americans are buying three and four washing machines either.
But that image is not the whole truth.
Whirlpool is a $21 billion, Fortune 500 company with 100,000 employees. In addition to those manufacturing plants in Ohio, Tennessee, Oklahoma and Massachusetts, according to its website, it has three manufacturing facilities in Mexico, including in Monterrey, just across the U.S. border.
It manufactures in France, Italy, the United Kingdom, Poland, Slovakia, Russia and Turkey. It manufactures in South Africa. There's nothing wrong with that. It comes with being a global company.
It manufactures in Brazil, Colombia and Argentina, has offices in Chile, Peru, Ecuador and Guatemala. In Latin America, it has 12,000 employees.
Then there's Asia. It has 23,000 employees, with regional headquarters in Shanghai overseeing 20,000, and in Gurgaon, India, overseeing 3,000. In addition to manufacturing in India and China, it also manufactures in Taiwan, and has a technology center in Shenzhen.
But no footprint in either Vietnam or Thailand, the top two importers into the United States. That where Samsung and LG manufacture, having previously moved from South Korea to China.
This is the problem with the Trump Administration thumbing its nose at the World Trade Organization, at NAFTA, at the South Korea Free Trade Agreement, at the Trans-Pacific Partnership, at multilateral trade agreements in general.
While it's a reasonable complaint to be frustrated by some of the outcomes of previous efforts to work within the system, or even the pace at which change occurs, working outside of it will certainly prove no easier. Even Trump's bombastic style would be more effective working within the global community than closing the doors and shuttering the windows.
That's what Trump and his U.N. Ambassador Nikki Haley discovered in the case of North Korea, that a well-reasoned argument can be effective in bringing around previously recalcitrant nations to a common cause. The battle continues but there are signs of progress.
Today, however, the decision will only prove to make imports more expensive. The tariffs might very well prove helpful to Whirlpool, which then has the option to hire more employees in the United States -- or across the U.S. border in Monterrey, so long as NAFTA is in place -- but it won't help most Americans, who don't build washing machines but who do buy them.
