Whirlpool is selling fewer appliances in its biggest market, but still raking in record profits, according to its first quarter earnings report.
Why it matters: Whirlpool, whose CEO once praised protectionist trade policies, quickly went from the winning side to the losing side of President Trump's trade war. But it's since fended off waning demand with price hikes on washers and dryers, which in turn, has caused even less demand.
The big picture, via the New York Times' Jim Tankersley: "Companies that largely sell imported washers, like Samsung and LG, raised prices to compensate for the tariff costs they had to pay. But domestic manufacturers, like Whirlpool, increased prices, too, largely because they could."
Background: Trump imposed tariffs as high as 50% on imported washing machines in January of last year, which Whirlpool hoped would turn consumers away from its foreign competitors.
- Months later, the Trump administration announced steel and aluminum tariffs, sending prices for the raw material needed to make appliances higher. "The global steel costs have risen substantially, and in particular, in the US, they have reached unexplainable levels," CEO Marc Bitzer told analysts last year, as CNN reports.
Yes, but: Researchers argue in a paper released this week that the industry's price increases are not a result of higher material costs, but "domestic firms exploiting their market power."
- Whirlpool isn't denying that. In a release alongside its earnings report, Blitzer attributed the strong results to "successful execution of price increases" despite "a soft demand environment."
- Shares of Whirlpool rose 8% in late trading on Monday.