U.S. Court Put Brake on Tariffs on Steel Imported from S. Korea

Posted on 18 December 2017

Source: Business Korea

The U.S. Court of International Trade (CIT) ruled, on December 15 (local time), that South Korea’s industrial electricity price does not benefit as a subsidy in the lawsuit which Maverick Tube Corporation and the U.S. Department of Commerce filed against Seah Steel in October this year.



This is the first time that not the U.S. administration but a U.S. court ruled so. Earlier, the Department of Commerce imposed countervailing and anti-dumping duties on South Korean steelmakers, claiming that steel imported from South Korea benefited from the industrial electricity price as a subsidy. However, the court ruling put a brake on the imposition of such duties and the disputes between the two countries in the steel industry are likely to enter a new phase.

Two months ago, Maverick Tube Corporation claimed that Seah Steel produced and exported line pipes to the United States while benefiting from the electricity price determined by the Korea Electric Power Corporation (KEPCO) influenced by the South Korean government. In claiming so, Maverick Tube Corporation mentioned, as its substantial evidence, The Minjoo Party leader Choo Mi-ae’s remark in 2013 that the South Korean government sold electricity worth nine trillion won (US$8 billion) to 100 large South Korean corporations at a price below its production cost for 10 years. Maverick Tube Corporation urged the imposition of high-rate tariffs against the privilege that can be regarded as a subsidy and urged the Department of Commerce to apply the Adverse Facts Available (AFA) to counteract the KEPCO’s refusal to disclose its power generation costs. The Department of Commerce applied the AFA to POSCO in August last year to impose a duty of 60.93% and to some other South Korean steelmakers such as Nexteel in October this year to impose a duty of 46.37%.

However, the court ruled that the price is not a special favor. According to the court, the Department of Commerce conducted an investigation from January to December 2013 and the result of the investigation showed that the price determined by the KEPCO was based on a structure common to other power companies and a standard received from an independent external auditor.  

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