Economic spin cycle: how anti-dumping duties could impact South African consumers

Daily Maverick

5 hours ago

South Africa's washing machines are about to get more expensive, and Defy is hoping that's good news.
The Department of Trade, Industry and Competition (DTIC) has endorsed the defence of the fully automatic top-loading washer hill.
What began as a complaint lodged by Defy Appliances has now become a formal anti-dumping investigation and, soon, the likely imposition of provisional duties against imports from China and Thailand.
It looks like a straightforward response to cheap foreign goods flooding the market, hammering local manufacturers and threatening jobs. But it is simultaneously a complex web of strategic policy, protectionism, precedent, and unintended consequences in the spin cycle.
A heavy load
The saga officially began in October 2024 when Defy asked the International Trade Administration Commission (Itac) to investigate imports of top-loading washers (10-17kg capacity) from China and Thailand.
Defy alleges dumping margins of 21.48% for Chinese products and a whopping 67.11% for Thai machines, figures based on SA Revenue Service import data and overseas retail prices.
It claims these imports have undercut local prices, slashed profits and forced an inventory build-up – a sign of unsold stock piling up in warehouses. In Defy's view, unless something is done, the injury will get worse as global overcapacity looks for cheap destinations such as South Africa.
Itac seems to agree, at least enough to say a prima facie case exists. Provisional duties are expected by the end of 2025.
Caught in a whirlpool
Hisense South Africa was named alongside Chinese giant Midea in the Government Gazette, but the company says there's nothing sinister at play.
'Hisense SA categorically affirms that it has never been complicit in facilitating any form of alleged dumping, nor has it acted in contravention of South African trade laws or ethical business practices,' Luna Nortje, deputy general manager at Hisense SA, told Daily Maverick. 'We are fully committed to fair, transparent trade and continue to work closely with all relevant regulatory bodies to ensure full compliance.'
'These are standard processes designed to ensure market fairness and in no way imply unethical practice,' she said.
Hisense's local credentials are significant. Since setting up shop in 1996, the company has invested more than R350-million into its Atlantis manufacturing plant, which today produces up to 500,000 refrigerators and a million televisions annually – not just for South Africa, but for export to more than 10 African countries.
In fact, Nortje said Hisense was exploring further localisation: 'We are currently in the process of assessing the viability of manufacturing chest freezers at (the Atlantis) facility.'
That said, she acknowledged the consumer pain. 'These tariffs will sadly affect consumers – as the product prices of those specific items would correspondingly increase.'
A beast of Defy's own design
Defy has danced this policy waltz before. Back in 2004, the company lobbied for a reduction in washing machine tariffs – it had halted local production and argued that duties hurt consumers. Then in 2019, it asked for a 30% hike on smaller top-loaders to protect planned investments in local manufacturing.
Fast forward to 2025, and Defy is calling for protection again, but this time with localisation and industrial strategy riding shotgun. The DTIC's 'Reimagined Industrial Strategy' leans heavily on import substitution and job retention, and Defy's latest campaign aligns perfectly with those goals.
In a way, the company is using trade policy not just as a shield, but as a tool to de-risk investment. Whether that's smart industrial pragmatism or self-serving protectionism depends on where you sit in the value chain.
Copying moves from across the pond
South Africa's washer war borrows heavily from America's. When Whirlpool triggered a trade war in the US against Samsung and LG a decade ago, it led to a game of global musical chairs.
Once South Korean and Mexican washers were slapped with duties, production shifted to China. Then, when Chinese goods were targeted, factories moved to Thailand and Vietnam. This tactic (called 'country-hopping') made the US tariffs look more like speed bumps than roadblocks.
Defy's decision to hit both China and Thailand out of the gate is a direct nod to that history; to plug the loopholes before they appear. But the American experience also shows how these moves can backfire.
Prices on US washing machines rose by nearly 12% after those 2018 tariffs. Even dryers, which weren't tariffed, saw price hikes because retailers usually sell them in pairs. In the end, American consumers forked out $1.5 billion more, for 1,800 saved jobs. That worked out to more than $800,000 per job.
Who wins, who spins?
South Africa's washing machine trade wars come at a bad time for the economy.
Winners:
Defy gets a reprieve, likely recovering margin and market share.
Policymakers score localisation points and can point to job protection.
Local component suppliers might benefit if production ramps up.
Losers:
Consumers face higher prices – potentially 22% or more on affected washers.
Low-income households bear the brunt; appliance affordability is a key cost-of-living metric.
Retailers and importers scramble to find new sources, maybe from Vietnam, Turkey or Eastern Europe.
Chinese and Thai exporters are likely to lose Southern African Customs Union market share, at least temporarily.
Even complementary goods such as dryers could see price bumps, mimicking the US model. And as Defy gains pricing power, don't expect them to keep prices flat.
Airing dirty laundry
Anti-dumping duties sound noble, shielding local jobs from unfair trade, but they also set a precedent. What's stopping other industries from filing similar complaints? And if each results in price hikes, the inflationary impact stacks up.
This matters for the South African Reserve Bank, which is already trying to keep inflation within the 3-6% target band. Appliances might be a small piece of the pie, but multiple actions like this create a cumulative effect.
There's also the question of what happens in five years when the duties expire. Itac will have to decide whether the 'injury' risk still exists, and that decision will be just as political as it is economic… and Defy needs to show it was worth the effort with local investment. DM