U.S. sees Dramatic Fall in its Steel Imports from Southeast Asian Countries especially South Korea

The steep duty of 25% on steel imports announced by U.S. last year has negatively impacted the steel exports of Southeast Asian countries. However, South Korea's steel exports to the United States in 2018, fell more than those by key rivals China and Japan that were subject to higher tariffs.

As per the Korea Trade-Investment Promotion Agency (KOTRA) data, U.S. imports of steel from Southeast Asian countries, including South Korea, China, Japan, and Taiwan, diminished visibly in the January-November period 2018. The analysis was based on statistics from the U.S. Commerce Department.

South Korea, that was the biggest steel exporter to the U.S. since the past few years, exported 2.43 MnT of steel during Jan-Nov'18, down 24.8% against 3.23 MnT in the previous year. In monetary terms, the total export value shrank by more than 13%.

In the case of Japan, its exports volume fell by 21% and in monetary terms, the same fell by 0.7% y-o-y basis. China's steel export volumes to U.S. diminished by 13.6% and in monetary terms sum plunged by 7.3% against last year.

This significant fall in South Korean steel exports to U.S. has questioned the former's decision to opt for quota instead of higher tariffs. In March last year, when U.S. has announced import duty of 25% on steel imports, Seoul and Washington had struck a deal where in exchange for blanket duty of 25% on steel imports from Korea, the imports were made limited to a quota of 70% of the total shipments for the years 2015 to 2017.

Also, industry research suggests that China and Japan benefitted from tariff exclusions than South Korea. Industry data shows that China got 2,386 product exclusions that were equivalent to some 40% of its steel exports volume to the U.S. whereas Japan received 3,480 product exclusions, equal to 62% of its steel exports volume. However, in the case of South Korea, the country has requested 2,733 exclusions and got only 228 approved, 279 dismissed and 2,226 under review.

KOTRA has said that South Korea was late in requesting exclusions because the U.S. initially did not allow exemptions for countries that accepted the quota system. The rule was changed in August last year.