Curtis Ellis: The Other Korea Threat–It’s Deadly Too

Whirlpool vs Samsung washing machines
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Just as there are two Koreas, North and South, there are two Korea threats.

While much attention has been paid to North Korea’s threat to deliver nuclear devastation to our shores, the devastation delivered from South Korea has already landed.

The North threatens the U.S. with a dirty bomb. The South, with washing machines. Both North and South have flouted U.S. efforts to curb their threats.

In 2013, the U.S. government found that washing machines made in South Korea and Mexico by South Korean conglomerates Samsung and LG were being sold in the U.S. at illegally low, below-market prices.

In other words, the South Korean giants were selling their products in the U.S. for less than they cost to produce.  This is an old – and illegal – trick, one that John D. Rockefeller used to drive the competition to Standard Oil out of business.

In this case, the competition is Whirlpool, the iconic American appliance maker. Samsung and LG’s predatory trade practices threaten the livelihoods of 15,000 manufacturing workers Whirlpool employs in America, especially the 4,000 at the Clyde, Ohio washing machine factory.

The U.S. International Trade commission slapped a tariff on Samsung and LG imports from South Korea and Mexico to make up for the under pricing.

The two companies responded by moving production to China in order to evade the tariff and continue selling washing machines in the U.S. at below market prices. Samsung and LG replaced their dumped washers from Korea and Mexico with dumped washers from China.

Last year, the Commerce Department took action and ordered U.S. Customs and Border Protection to begin collecting taxes on the companies’ washing machines imported from China.

What did Samsung and LG do? They moved their washer production again, this time to factories in Vietnam and Thailand.

The South Korean cartelists are serial violators, deliberately evading the U.S. government attempts to enforce international norms and laws.  Kim Jung Un would be proud.

Now, Whirlpool is asking the U.S. International Trade Commission and President Trump to take action against the latest attempt by Samsung and LG to evade U.S. trade laws – an action the companies cannot circumvent.

Thankfully, the case has cleared its first threshold; the ITC voted Thursday that washing machine imports are hurting domestic manufacturers. Now, it’s up to President Trump to impose tariffs, quotas or other restrictions to make sure the companies end this pattern of bad behavior, no matter where their machines were made.

The Whirlpool case is an example of the unfair competition American companies in many industries face from foreign adversaries.

Samsung and LG are not creatures of the free market. They are classic crony capitalist operators. They owe their power, prestige and very existence to special loans and favors from the South Korean government. The Koreans refer to these conglomerates as chaebols.  These enterprises arose from the ashes of the Korean War as the centerpiece of the South Korean government’s drive to industrialize.

The special treatment accorded Samsung and LG by South Korea’s government is similar to the favors Beijing gives state-owned and “national champion” enterprises in China. The Chinese communist government regularly rewards them with low or no-interest loans, cut rate energy and technology pried or stolen from foreign companies so they will have an unfair advantage over foreign competitors.

China has driven the U.S. aluminum industry to the brink of extinction with such predatory practices.

These unfair trade practices are killing more than American jobs and industries. They are literally killing our people.

Research by the National Institute of Health found “a positive and significant association between job loss during the past year and average daily [alcohol] consumption, number of binge drinking days, and the probability of an alcohol abuse and/or dependence diagnosis.”

And a new study by the National Bureau of Economic Research finds that as the unemployment rate increases by one percentage point, deaths by opioid overdose rise by 3.6 percent, and emergency-room visits rise by seven percent.

The Centers for Disease Control reports over 64,000 deaths from opioid overdoses in the U.S. last year. They are centered in the areas hit hardest by unemployment and deindustrialization.

Cable news has devoted considerable time to contemplating the death toll from a hypothetical nuclear war with North Korea.

The economic war we are engaged in with China, South Korea and crony capitalist regimes around the world has very lethal consequences for Americans.

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