Are you in the market for a new washing machine? You might want to make a decision on a model sooner rather than later after learning about the new tariff imposed by the government. President Trump announced on January 23 that the government will be adding a tax, or tariff, on imported washers this year alone. Here's how it works.
The tax begins at 20 percent for the first 1.2 million imported washing machines sold this year. After the first 1.2 million, the tariff increases to 50 percent for every other washer brought in after that. Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, echoed the urgency of purchasing now to CNN Money, saying, "Anybody who is thinking about buying a washing machine should do it right away."
The tariff's purpose
It's clear that the tariff is designed to drive consumers away from foreign-made washers in order to give American-made machinery a boost in the U.S. economy. Here's what CNN Money predicts will happen:
- Foreign-made washing machines will become expensive to import
- Foreign manufacturers may not pass the tariff cost onto customers, but prices will still increase
- Whirlpool, the largest U.S. manufacturer of washing machines will face less foreign competition.
In effect, by giving Whirlpool freedom in the marketplace because it won't be slapped with the tariff, we could see a price raise in Whirlpool's product line since it will face more expensive foreign competition. While CNN Money confirmed that Whirlpool has yet to indicate if it will raise prices, it's an interesting thought on the heels of severed 101-year deal with Sears.
How many washing machines imported currently?
Per CNN's report and research through the U.S International Trade Commission, which is an independent body, Mexico exported $240 million of washers to the U.S. in 2016. China sent $425 million, and South Korea sent about $130 million to the U.S. market.
Samsung and LG are some of the top importers to washing machines in the U.S., however as CNN also pointed out, Samsung moved production of its washing machines to a plant in South Carolina that will employ about 600 Americans. Here's a list of American-made washing machines.
American-Made Washing Machines
- Whirlpool (also creator of some Kenmore models)
- Speed Queen
Wait, what about NAFTA?
The tariff also affects the current NAFTA renegotiations, which is the trade pact between Canada, the U.S., and Mexico. President Trump has consistently stated that he would be willing to leave NAFTA if renegotiation talks don't reach a deal that benefits American manufacturing workers. The North American Free Trade Agreement was established on January 1, 1994, and created a bilateral trade bloc in North America.
You can expect to see the tariff changes take place in the next few months, and prices won't shoot up overnight. However, if you're thinking about purchasing or upgrading to a new washing machine in the next year, it might be best to peruse the market now.