As per the latest updates, South Korea’s hot-rolled
steel have received sharp relief from high preliminary antidumping and
countervailing findings from the United States that were imposed in 2016.
In case of anti-dumping duty, the U.S. Department of
Commerce issued its final ruling on Korean-made hot rolled steel plates and the
final antidumping duties announced for South Korea’s largest steelmaker POSCO
is at 10.11%, second-largest steelmaker Hyundai Steel at 5.44%, and other local
makers at 7.78%. In 2016, the same had been set at 4.61% for POSCO and 9.49%
for Hyundai Steel. Those rates were adjusted to 7.67% and 3.95% respectively in
its preliminary decision made in last November.
Industry insiders are of the opinion that Washington
apparently decided to impose high anti-dumping duties based on the Adverse
Facts Available (AFA) provision, which allows the levying of extremely high
anti-dumping and countervailing tariffs if an accused company doesn't provide
the data demanded by authorities.
On the other hand, in case of countervailing duty, the
U.S. government has lowered the same on the products from 41.57% to 0.55% for
POSCO and from 6.02% to 0.58% for Hyundai Steel.
Thus, despite slight hikes in anti-dumping duty,
overall U.S. tariffs on South Korean steel goods has gone down. The total
effective duties being imposed on both the companies are slashed from 63.29% to
10.66% for POSCO and from 13.38% to 6.02% for Hyundai Steel, compared to the
initial ruling in 2016.
This duty cut on hot-rolled steel plates will provide
relief to the U.S.’s end-user segment including automobile, machinery, and
building materials as these products find their applications in above-mentioned
sectors. Hot-rolled plates are the key export product for Korean steelmakers,
with Korea’s exports to the U.S. reaching 477,000 tonnes in 2018.
What could have made U.S. lower down duties?
In a bid to protect the domestic steel industry, the Trump government have
announced a variety of trade protectionism measures including 25% tariffs on
steel imports from most of the countries. This led to a dramatic surge in domestic
steel prices of almost 50% in the country.
However, within 10 months of these tariffs imposition,
steel prices in the United States have now fallen back to levels last seen
before the tariffs were imposed. The reason being the price hike has ultimately
hurt end-user demand as industries that rely on the metal, like automakers and
homebuilders, struggled to absorb the rising costs or passed them on to
customers. Many businesses chose alternative materials or delayed investments,
putting pressure on steel prices, which have since fallen.
Subsequently, American businesses and trade groups have
been repeatedly urging the Trump administration to remove the tariffs, arguing
they hurt domestic companies, not competitors, and will ultimately undercut
economic growth. Thus, with no revival in the domestic steel industry despite
tariffs and poor domestic demand from end-users segment must have pressurized
the U.S. government to lower down tariffs on hot-rolled steel plate imports
from Korea.
Source: Steel mint