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President Trump's tariffs could have opposite effect intended for Tennessee plant



NASHVILLE, Tenn. -- Tariffs on washing machine imports issued by President Trump could have the opposite effect he intended for one company trying to expand in Tennessee.

Multinational electronics company LG Electronics broke ground on a new $250 million facility in Clarksville, Tenn. last August which was planned to open in 2019.

The 829,000 square-foot facility is expected to be one of the most-advanced production plants for washing machines in the world, but excitement for the new facility was dampened with the tariff announcement.

That's because LG Electronics is based in South Korea and will be importing their washing machines until the Tennessee facility can take over production. Expected to bring 600 full-time jobs to the state and meet U.S. demand, expectations are now going to depend on how LG is affected by the tariffs.

Starting February 7th, President Trump's directive issues a 20% tariff on the first 1.2 million washers imported, then a 50% tariff on all imported washers after the first 1.2 million.

John Taylor, Corporate Communications Director for LG Electronics says that causes a problem. "In 2017 about 3 million washers were imported industry-wide," Taylor says.

LG is announcing to retailers this week a 4-8% hike in prices starting March 8th to compensate for the tariff. The prices cover both washers and dryers since they are sold to retailers as a set.

"These are pretty significant trade sanctions," Taylor says. "The irony here is we're doing exactly what President Trump wants us to do. Hiring American workers and manufacturing American-made products."

While it's too soon to tell how the tariffs will impact the market as a whole, Taylor says the big concern is how it impacts the startup in Clarksville. "We just need to get through the next 8 months to be in full production by quarter four," Taylor says.

If LG does see production impacted and loss of retail floor space, it could affect plans for the Clarksville plant.

"Instead of 600 people, maybe we decide we need fewer," Taylor says. For now, the company has ramped up construction. Taylor says there are 150 people a day working 7 days a week in an effort to accelerate completion.

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