United States Nails Anti -Dumping Duty on Hyundai Steel

The South Korean steel makers are under pressure as the United States(U.S.) Department of Commerce made an annual preliminary judgment on welded line pipes exported by Korean steelmakers, raising anti-dumping duties up to 19.42 % according to reports.

The U.S. had levied a 6.23 percent anti-dumping duty on Hyundai Steel and 2.53 percent on SeAH Steel in 2015 December, insisting that they exported the welded line pipes to the United States at prices lower than they charge in Korea.

U.S regularly reexamines whether to extend tariffs or not as well as how much the tariffs should be, taking into account the market condition and the quantity of the imports. It was the first preliminary judgment since then, and it tripled the anti-dumping tariffs on Hyundai Steel to 19.42 percent.

The U.S. raised anti-dumping tariffs this time taking issue with the fact that the steelmakers are using hot-rolled steel sheets supplied by POSCO to produce their welded line pipes.

The U.S. had slapped 3.89 % anti-dumping duties and 57.04 % anti-subsidy duties on POSCO last year, claiming that POSCO is virtually getting a subsidy from the government through low electricity rates.

The U.S. is levying high tariffs at its own discretion using ambiguous provisions and when it slapped heavy duties on POSCO, it applied its particular market situation (PMS) provision, according to which the U.S. can impose high tariffs at its discretion when it determines that the market situation of a specific country is abnormal.

The U.S. is also using the adverse facts available (AFA) provision, which enables levying extremely high anti-dumping and countervailing duties in case the accused company doesn't hand in the data demanded by the U.S. government.

Following the anti dumping duty on Hyundai Steel, there is also the possibility of the U.S. slapping high anti-dumping duties on any Korean steelmaker for using POSCO's hot-rolled steel sheets.

According industry analyst there doesn't seem to be much option for Hyundai Steel as the Donald Trump administration has been strengthening protectionism in trade to support domestic companies. There is little that a single company can do to protest the measure.

Soon U.S. is to come up with the final judgment regarding the tariffs in the third quarter.