U.S. Increases Tariffs on South Korean Steel Pipes Import, Indirectly Blaming POSCO
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According to latest reports, on 10 Oct'18 the U.S. department of Commerce (DoC) has increased the preliminary tariffs on heavy walled rectangular welded (HWR) carbon steel pipes and tubes manufactured by the South Korean manufacturers.
In 2016, U.S. DoC had found dumping of HWR carbon steel pipes and tubes in the country by Korean manufacturers and a dumping margin of 2.34% was imposed on Dong-A Steel Company, of 3.82% on HiSteel Co. Ltd and dumping margin of 3.24% on all other producers/exporters in Korea.
Now in its annual review for 2018, US DoC has increased the tariffs on Dong-A Steel Company from 2.34% to 30.61%, an increase of 28.27 percentage points whereas the tariffs on other Korean HWR carbon pipes and tubes manufacturers including Hyundai Steel have been increased to 18.86%.
HWR pipes are used for low pressure conveyance of gas, water, oil, air steam or other fluids. They are used in machinery, buildings, sprinkler systems, irrigation systems, and water wells. Korea has exported USD 43.77 million worth of these products to the U.S. last year in 2017.
The US DoC has blamed South Korean steel major POSCO for increase in HWR pipes and tubes tariffs. According to the department, these welded pipes and tubes are being manufactured using POSCO's hot-rolled steel plates and U.S. DoC regards the use of POSCO's hot-rolled steel plates as unfair on the grounds of market-distorting effects caused by injurious dumping and unfair subsidization of hot-rolled plates exports by the company into the United States. In 2016, U.S. has already imposed tariffs of up to 61% on hot-rolled steel plates manufactured by POSCO.
Amid this blame game, damage is being done to Korean pipes and tubes manufacturers. Korean companies say that the U.S. department's logic does not hold water. They are of the opinion 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 tariffs on POSCO's steel plates not because POSCO actually dumped its products or received subsidies from the Korean government but because POSCO allegedly stonewalled (obstructed the process) the department's investigation. The high tariff on POSOCO, they say, was designed to punish POSCO.
Korean companies are now likely to appeal to the U.S. Court of International Trade (CIT). This is because last month, the court had concluded that the U.S. Commerce Department has set the tariff rate for POSCO products without a reasonable ground. The court ruling compelled the department to revise the tariff rates on some products. Therefore, industry experts are of the opinion that there is a possibility that if the tariffs on some of the POSCO's products can be cut, the tariffs on other products including steel pipes can also be lowered.
