Trump faces trade dilemma as S.C. pushes to protect new plant

Trump signs two executive orders on trade, calls the American worker his 'North Star'

President Donald Trump signed two executive orders on trade at the White House Friday. Trump's goal is to help American workers by increasing jobs and preventing companies from going overseas.
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President Donald Trump signed two executive orders on trade at the White House Friday. Trump's goal is to help American workers by increasing jobs and preventing companies from going overseas.

At a high-priced, closed-door fundraiser in South Carolina for Gov. Henry McMaster, President Donald Trump gave a shoutout to Samsung, the South Korean home appliance manufacturing giant with a new plant coming to the Palmetto State.

“The Samsung people, they’re a great company,” Trump proclaimed, directing his remarks to the company representatives who were actually in attendance. “I have bought a lot of Samsung television sets over the years. Thousands, thousands.

“Washing machines, they make good washing machines,” he added.

Trump’s praise might have seemed benign enough if it weren’t for the fact that by early December, he’ll have to decide whether to levy harsh sanctions on Samsung.

Many fear the penalties, which could come in the form of 50 percent tariffs, could result in Samsung deciding to scrap plans to open the new plant in Newberry, S.C., putting nearly 1,000 local jobs immediately at risk.

Under ordinary circumstances, Trump’s decision would be easy: Enforce the penalties.

The International Trade Commission earlier this month determined that Samsung was unfairly squashing domestic competition — Whirlpool, in this case — by producing large residential washing machines overseas and importing them to the U.S. to sell at cheaper prices. Trump has made “make American manufacturing great again” a hallmark of his rhetoric on the campaign trail and in the White House.

Whirlpool spokesman Patrick O’Connor said Thursday that higher tariffs on Samsung were necessary to help level the playing field for domestic manufacturers, and South Carolina would stand to benefit.

“A stronger remedy will only create a stronger incentive ... to invest in production here,” he explained, adding the penalties “would accelerate investments in South Carolina ... not slow them down.”

Trump agreeing to higher tariffs might not be so simple. Samsung has argued the Newberry plant is not only proof of its commitment to producing washing machines inside the United States and bolstering the U.S. economy, but that penalties could make the South Carolina operation difficult to sustain.

“If we are unable to offer our full range of products to retailers and consumers, we will lose floor space and sales, impacting the success of our South Carolina operation,” John ,Herrington, senior vice president of home appliances for Samsung, told the ITC at a Washington hearing Thursday. “So the ultimate impact of the proposed tariff is a lose-lose scenario for U.S. production, U.S. employment, and U.S. consumers.”

McMaster and Newberry’s congressman, Republican Rep. Ralph Norman, are also sounding warnings.

“The commission’s actions today could chill a community and manufacturing success story before it gets a chance to take off,” McMaster told ITC commissioners on Thursday. “South Carolinians want and need this facility to be successful, and this case, as you know, threatens this outcome.”

“Let there be no doubt, Samsung’s facility in Newberry fits your definition of domestic industry,” Norman added in separate testimony. “Samsung is a company invested in U.S. production and U.S. jobs. Samsung’s investment in South Carolina has made it an integral member of the domestic industry.”

McMaster and Norman also painted a scene of a demoralized South Carolina workforce after two nuclear production power plants had to halt construction due to their parent company’s crippling bankruptcy.

“Customers were left with a $1.5 billion loss they didn’t have anything to do with,” Norman said. “So needless to see the residents of Newberry are petrified of losing this (plant).”

Though the ITC will make the final recommendations, Trump gets to make the final call on whether to put them into effect.

He might have put himself in a bind.

Following his testimony to the ITC on Thursday morning, McMaster confirmed he had spoken to Trump directly about the Samsung plant just a few days earlier at the South Carolina fundraiser. Trump even had a chance to speak personally with Samsung representatives, including a senior vice president, the governor said.

“He’s interested,” McMaster said of the president.

McMaster and Norman also pointed out that Commerce Secretary Wilbur Ross has supported the plant, saying at the official announcement in June that Samsung’s decision to come to South Carolina marked “exactly the kind of job creation and investment that the administration is seeking for American workers.”

Trump’s leanings are hard to predict.

McMaster wouldn’t commit to further lobbying Trump once the ITC makes the formal recommendations — “We’ll see,” he told McClatchy. But the two have enjoyed a close relationship since McMaster endorsed Trump for president before the crucial 2016 South Carolina primary, a time when backing Trump was still seen as a risky gambit.

There is also some speculation that Trump still owes McMaster a debt of gratitude, though one could argue McMaster already cashed in by asking Trump to appear at his reelection fundraiser Monday.

Another South Carolinian who could hold some sway over Trump is Republican Sen. Lindsey Graham, who after nearly two years of public sparring has become a political ally and even friend. The two men went golfing together twice in one week.

On Capitol Hill on Thursday, Graham said the Samsung plant in Newberry represented the very best of current trade deals, with a South Korean company building products in the United States and vice versa.

“Foreign direct investment is good,” he said. “They are coming to America because they are closer to the market. They are coming here for business reasons, for a great workforce in South Carolina. They’re coming here because it’s good business to make washing machines in America to sell to Americans.”

But as for what Trump will ultimately decide, Graham also couldn’t say.

“I don’t know where this is going,” he said.

Jamie Self from The State contributed to this report.

Emma Dumain: 202-383-6126, @Emma_Dumain