U.S. Slaps High Tariff on Korean Steel Pipes by Blaming POSCO's Hot-Rolled Steel Plates

Posted on 12 October 2018

Source: Business Korea

The United States slapped a high tariff on Korean steel products once again by finding fault with POSCO’s hot-rolled steel plates.

According to the steel industry on October 10, the U.S. Department of Commerce recently laid a preliminary tariff of 30.61 percent on the heavy walled rectangular welded carbon steel pipes and tubes from Dong-A Steel Co., a mid-sized Korean steelmaker, after an annual review.

The preliminary tariff was 28.27 percentage points higher than the rate imposed on them in a 2016 ruling. Tariffs on products from other Korean steelmakers, including Hyundai Steel, also rose from 3.24 percent to 18.86 percent. Heavy walled rectangular welded carbon steel pipes and tubes are used for offshore structures. Korea exported US$43.77 million worth of these products to the U.S. last year.

The U.S. Department of Commerce pointed out that the heavy walled rectangular welded carbon steel pipes and tubes were made with POSCO’s hot-rolled steel plates, which it claimed were subsidized by the Korean government. The department imposed a tariff of nearly 60% on POSCO’s hot-rolled steel plates, saying that POSCO did not actively cooperate with its investigation.

The U.S. Department of Commerce has been imposing high tariffs on Korean steel products that were produced using POSCO's hot-rolled steel plates. The department told the same story when it imposed tariffs of 18.77% and 47.62% on Korean steel pipes for oil pipelines and oil wells, respectively, this year. As the department regards the use of POSCO's hot-rolled steel plates as unfair, damage is being done to other Korean steel products made with them.

Korean companies say that the department’s logic does not hold water. They assert that the high tariff imposed on POSCO’s hot-rolled steel plates should not be applied to the Korean steel pipes because the department imposed a high on POSCO’s steel plates not because POSCO actually dumped its products or received subsidies from the Korean government but because POSCO allegedly stonewalled the department’s investigation. The high tariff on POSOCO, they say, was designed to punish POSCO.

Korean companies have no choice but to appeal to the U.S. Court of International Trade (CIT). Last month, the court concluded that the Commerce Department set the tariff rate for POSCO products without a reasonable ground. The court ruling compelled the department to set the tariff rate again. Therefore, some experts say that there is a possibility that when and if the tariff on POSCO’s products is cut, the tariffs on other products including steel pipes could also be lowered. 

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