IN January, the Whirlpool company welcomed new U.S. tariffs on washing machines. But less than seven months later, the big home-appliance maker has changed its tune, having fallen victim to the spreading trade war launched by President Donald Trump.

When the White House announced its first protectionist trade measures early this year, the CEO of the Michigan-based company, Marc Bitzer, greeted them as a “positive catalyst for Whirlpool.”

Bitzer figured that the tariffs, for which he had vigorously campaigned, would slow the dynamic growth of two of Whirlpool’s biggest rivals, giant South Korean companies LG and Samsung, which he and others accused of unfair competition.

What Bitzer did not anticipate was that the trade measures would spread in March to other sectors, as the U.S. president imposed additional tariffs of 10 percent on aluminum imports and 25 percent on steel. China was one of the first countries targeted, followed in June by the European Union, Canada and Mexico, which in turn took retaliatory measures.

As a result, prices for steel – the basic raw material Whirlpool uses in its appliances – have shot up. They are now 60 percent higher in the United States than in other countries, says the company, which manufactures washing machines, dryers and dishwashers in the U.S. for domestic sale.

“Global steel costs have risen substantially,” Bitzer said, “and in particular in the U.S. they have reached unexplainable levels.”

Bitzer, whose smiles of January faded long ago, said the “uncertainty” surrounding tariffs “disrupts our supply chain.”

That uncertainty is cutting into Whirlpool’s profits – increasing its costs by an estimated US$350 million in 2018, a full US$50 million more than the estimate in January.

In this year’s second quarter, the costs of materials – steel and resin – rose in three of the four main regions where Whirlpool does business – North America, Europe, Asia and the Middle East/Africa.

Not surprisingly, the group is bracing for weaker sales and profits this year, following a net loss of US$657 million in the second quarter.

Whirlpool shares have lost 31 percent of their value on the New York Stock Exchange (NYSE) since January, and the insurance premiums paid by its creditors to protect against an eventual default have reached their highest point since November 2016.

To limit the damage to its bottom line, the company –like its main competitors – has increased prices, passing on a portion of its higher costs to consumers. In June, prices for washers and dryers were 20 percent higher than the year-earlier level, the biggest jump in 12 years, according to U.S. Labor Department data.

“We are standing firm in our price increases” even as sales have slowed, Bitzer said, adding that it was “the only right thing to do with such a cost inflation environment.”

Whirlpool sales in the U.S. slipped by 2.2 percent in the second quarter and by 12 percent in Europe and the Middle East/Africa. (SD-Agencies)