Posted on 20 Oct 2023
As the U.S. administration has raised a countervailing duty on Korean steel products by regarding cheap electricity in Korea as a kind of government subsidy for steelmakers, the Korean government has confirmed its decision to challenge the U.S. administration over the case in the U.S. court along with the Korean steel industry.
“Energy prices have gone up in Korea but the U.S. Department of Commerce is saying electricity bills are subsidies for Korean steel companies,” said Ahn Deok-keun, head of the Trade Negotiations Division at the Korean Ministry of Trade, Industry and Energy, in a meeting with reporters at the Korean government’s Sejong Complex on Oct. 17. “We will try to change that by filing a complaint with the U.S. Court of International Trade (CIT).”
The U.S. Commerce Department finalized a countervailing duty rate of 1.08 percent on Korean steel plates on Oct. 7. This was a significant increase from a year ago when the countervailing duty rate was in the low 0.2 percent range. The department specifically cited Korean steelmakers’ use of low-priced electric power as the largest factor in the countervailing duty rate raise (0.51 percent). It considered the low-priced electric power a de facto Korean government subsidy for Korean steelmakers, claiming that state-run KEPCO had not raised electricity charges enough to cover its large deficits. This means that the U.S. Commerce Department made the matter worse by increasing the tariffs that Korean steelmakers have to pay when exporting their steel products to the United States as electricity charges already rose 40 percent over the recent 1.5-year period in Korea.
“Since the World Trade Organization is not working, we are planning to proceed with the case in the U.S. court of law,” Ahn said, adding that Korean steelmakers are also in favor of this because they will be able to get back the tariffs that they have paid if they win the case.
“The U.S. has a strictly managed trade system for steel products,” Ahn added, “However, U.S. anti-dumping and countervailing duties are not as high as before. They are within 2-3 percent for volumes within each country’s duty-free export quota. Thus we will continue to monitor and respond to the U.S. anti-dumping and countervailing duties.”
Since 2018, under U.S. President Trump, the U.S. administration has effectively restricted steel imports by setting a quota for each country out of national security concerns and applying a tariff of 25 percent to steel products from countries that exceed their quotas. It is also using anti-dumping and countervailing duties under various pretexts. Last year, it slapped countervailing duties on steel products for failing to reflect soaring ocean freight rates in their prices.
Source:Business Korea
