Korean steelmakers under pressure over US anti-dumping probe
[THE INVESTOR] Korean steelmakers struggling in saturated markets faced heavier pressure on April 20 over the US government’s plan to investigate carbon and alloy steel wire rod imported to American soil, which could lead to more tariffs on their products.
The Department of Commerce said it would start an investigation of the products from 10 countries, including Korea, to look into how much the alleged dumping practices and subsidized imports contribute to the US trade deficit. The investigation will cover hot-rolled products of carbon and alloy steel under a 19 millimeters in thickness.
The probe is expected to kick off officially with US President Donald Trump signing an executive order as early as on April 20, according to Politico, quoting sources familiar with the plan. Under US trade law, the commerce secretary is required to report the investigation results within 270 days if a certain product could threaten the national security or damage the viability of the US steel industry.
This is the first anti-dumping investigation since President Trump took office in January. The US International Trade Commission is set to make a preliminary ruling next month. The final decision is likely to be made early next year.
The list of countries includes Belarus, Italy, Russia, South Africa, Spain, Turkey, Ukraine, the United Arab Emirates and the United Kingdom. Korea is the second-largest foreign supplier of wire rod to the US, following Ukraine, with over 92,000 metric tons last year, valued at $45 million. POSCO , the nation‘s largest steelmaker, is the only Korean supplier of such product to US. The portion of wire rod exported to US last year, is insignificant, as it accounts for only 0.5 percent of all products shipped overseas, the company said.
The probe came after petitions filed by four US steelmakers: Gerdau Ameristeel US, Nucor, Keystone Consolidated Industries and Charter Steel. They have been calling for the US government to levy additional tariffs ranging between 33.96 percent and 43.25 percent on Korean exports.
The plan is not new, but appears to be a part of a series of actions taken by the US government to add pressure to Korean steelmakers. Last week, the US government hiked anti-dumping tariffs on Korean oil tubes by up to 24.92 percent.
A 24.92 percent tariff rate has been imposed on oil country tubular goods from Nexteel, 2.76 percent on SeAh Steel and 13.84 percent on Hyundai Steel.
Posco has already been slapped with additional tariffs by the US government -- 60 percent anti-dumping tariffs on both cold- and hot-rolled steel sheets last year.
Such actions, which are apparently likely to continue, could deal a blow to Korean steelmakers already reeling from market saturation.
But there is nothing that as an individual company can do, said an industry insider.
There are cases of Korean companies bringing the anti-dumping tariff cases to World Trade Organizations, but none of cases have been accepted, he said, citing lack of Seoul government‘s support.
Meanwhile, Posco said it would increase exports of high-quality steel products that do not overlap with products produced by local steelmakers.
“The company’s wire rod products exported to the US are mostly high quality steel, which is difficult to source from local manufacturers,” said the company in a statement.
“We will try to highlight this aspect so that the company could be excluded from the list of anti-dumping suppliers.”
By Cho Chung-un/The Korea Herald (firstname.lastname@example.org)