U.S. slaps anti-dumping duties on Hyundai Steel

08/01/2018 12:00 - 519 Views

The United States is increasing pressure on Korean steel makers, slapping irregularly high anti-dumping tariffs on them.

According to sources in the steel industry, the U.S. Department of Commerce made an annual preliminary judgment on welded line pipes exported by Korean steelmakers, raising anti-dumping duties to up to 19.42 percent. 

Back in 2015 December, the U.S. had levied a 6.23 percent anti-dumping duty on Hyundai Steel and 2.53 percent on SeAH Steel, insisting that they exported the welded line pipes to the United States at prices lower than they charge in Korea. It regularly reexamines whether to extend tariffs or not as well as how much the tariffs should be, taking into account the market condition and the quantity of the imports. It was the first preliminary judgment since then, and it raised the anti-dumping tariffs on Hyundai Steel by triple to 19.42 percent.

The U.S. raised anti-dumping tariffs this time taking issue with the fact that the steelmakers are using hot-rolled steel sheets supplied by POSCO to produce their welded line pipes. The U.S. had slapped 3.89 percent anti-dumping duties and 57.04 percent anti-subsidy duties on POSCO last year, claiming that POSCO is virtually getting a subsidy from the government through low electricity rates. 

The problem is that the U.S. is levying high tariffs at its own discretion using ambiguous provisions. When it slapped heavy duties on POSCO, it applied its particular market situation (PMS) provision, according to which the U.S. can impose high tariffs at its discretion when it determines that the market situation of a specific country is abnormal. 

On top of the PMS provision, the U.S. is also using the adverse facts available (AFA) provision, which enables levying extremely high anti-dumping and countervailing duties in case the accused company doesn't hand in the data demanded by the U.S. government. 

Using such provisions, the U.S. had raised tariffs on Nexteel's oil country tubular goods (OCTG) to 46.37 percent last year from 8.04 percent in 2016, virtually blocking its exports to the United States. Following the tariff bomb on Hyundai Steel, there is also the possibility of the U.S. slapping high anti-dumping duties on any Korean steelmaker for using POSCO's hot-rolled steel sheets.

An industry expert said that there doesn't seem to be much option for Hyundai Steel.

"The Donald Trump administration has been strengthening protectionism in trade to nurture domestic companies. There is little that a single company can do to protest the measure," he said. 

The U.S. is to come up with the final judgment regarding the tariffs in the third quarter.
Source: Korea Times
 
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