Posted on 29 Mar 2022
The United States Department of Commerce said that its quota applied to South Korean steel exporters is not subject to renegotiations.
The South Korean government opted for the quota in 2018 in order to avoid high tariffs. Specifically, South Korea’s annual steel exports to the United States are limited to 70 percent of the average of its 2015 to 2017 steel exports to the United States. Since the implementation of the quota, the average annual exports have dropped from 3.83 million tons to 2.63 million tons.
Recently, the U.S. government decided to apply no tariffs to up to 500,000 tons a year when it comes to steel products imported from the United Kingdom. In addition, it eliminated high steel tariffs in relation to the European Union and Japan by adopting tariff rate quotas. Under the TRQs, non-tariff steel exports from the regions to the United States can be as large as 4.3 million tons and 1.25 million tons a year, respectively.
In South Korea, steel pipe exporters are being affected the most by the non-renegotiation decision. This is because steel pipes for energy and infrastructure purposes are in high demand these days, and yet their quota is fixed at one million tons a year.
The companies are trying to overcome the quota by increasing production in the United States. SeAH Steel USA in Houston is producing 250,000 tons of oil country tubular goods a year and Husteel is building an energy pipe factory with an annual capacity of 250,000 tons in Cleveland by investing 125 billion won. Nexteel is producing 120,000 tons of oil country tubular goods a year in Houston. According to the companies, the local production is not enough to meet the local demand and renegotiations are urgent.
Source:Business Korea
