South Korean steelmakers have become fretful of disadvantage standing in the United States after Washington agreed to remove the Trump-era high tariffs on Japanese steel after a similar move on European exports.

The U.S. Department of Commerce and the U.S. Trade Representative (USTR) announced on Monday that the U.S. signed a new 232 tariff agreement with Japan that will exempt up to 1.25 million tons of annual Japanese steel imports from the 25-percent levy imposed by the Trump administration. The 10 percent tariff on aluminum imports from Japan, however, is still in place.

The latest deal follows a similar agreement reached between the U.S. and EU in October last year that ended U.S. tariffs on EU steel and aluminum products that put under the Section 232 national security tariffs during the Trump administration. Since the launch of the Biden administration, the U.S. has been putting an effort to enhance relationships with traditional allies like the EU and Japan for common front against China’s ascent and unfair trade practices.

The U.S. has also begun similar talks with the United Kingdom regarding metal tariffs.

Washington however has not made any changes in trade terms with its traditional ally Seoul.

Korea has been exempted from the 25-percent tariffs on its steel products in the U.S. in exchange for a shipment quota. In 2018, Korea agreed with the Trump administration to cap its steel exports to the U.S. to 70 percent of its average export volume between 2015 and 2017.

But with its competitors enjoying similar benefit, Korean steel products could lose appeal.

Moon Sung-wook, the Minister of Trade, Industry and Energy (MOTIE), and Yeo Han-koo, the Minister of Trade for the MOTIE, met with US representatives shortly after the metals tariff agreement was signed between the U.S. and the EU to argue for amendment to steel trade barriers but to little avail.

In November last year, Yeo met with USTR Ambassador Katherine Tai, requesting steel tariff negotiations but she expressed concerns over challenges posed by excess capacity in steel and aluminum sectors.

Source: Pulse News