South Korea vowed to take action against U.S. antidumping tariffs imposed on South Korean steel pipes and tubes for oil drilling, worrying about the impact on the country's $818-million annual export of the products to the U.S.
The U.S. Commerce Department in July imposed tariffs of up to 16% on South Korean steel for allegedly dumping steel in the U.S. at unfair prices. The International Trade Commission, a U.S. federal body that investigates unfair trade practices, confirmed the tariffs last week.
The latest U.S. ruling was widely seen as a victory for U.S. steelmakers, especially U.S. Steel Corp. X +2.62% The industry is eager to protect its business of selling steel pipe and tube to American oil-and-gas drillers, in what is one of the world's most lucrative steel markets. The ruling supports U.S. steelmakers who say South Korean and other foreign competitors sold their products below cost to boost their market share in the U.S.
South Korean officials argue that U.S. steelmakers charge higher market prices than foreign-imported steel products.
The trade ministry in Seoul on Sunday said in a statement that it "will come up with appropriate counter measures based on legal reviews and discussions with the local industry" while expressing concerns about U.S. restrictions on steel imports.
Among their options: file a complaint to a U.S. court or take action at the World Trade Organization to get the punitive U.S. tariffs nullified.
Last month, two WTO panels ruled against U.S. duties imposed on Chinese steel and solar panels, as well as Indian steel from 2007 to 2012.
The confirmation last week of the latest U.S. antidumping duties sent shares of Hyundai Hysco 010520.SE +0.36% —one of the affected South Korean steelmakers—plunging more than 3% Monday. Hyundai Hysco spokesman Kim Byung-gyu said his firm will appeal the U.S. ruling, but didn't elaborate.
"We hope the government will file a complaint with the WTO," said Mr. Kim.
But the steel dispute isn't likely to escalate quickly.
"The [South Korean] steel industry wants to respond aggressively, but the government wants to take a legal review first and approach this prudently," said a Seoul trade official handling the U.S.-Korean steel case, asking not to be named.
He said the ministry is still looking into how the extra U.S. tariffs could affect South Korean firms that supply nearly a quarter of the U.S. demand for tubular steel goods. Last year, South Korea exported 894,300 tons of such steel products to the U.S.
Steel is a tariff-free item in U.S.-South Korean trade under the WTO multilateral regime, officials in Seoul said. The steel dispute is another setback to the bilateral trade because it marks the second major trade spat between South Korea and the U.S. since they launched a free-trade deal two years ago. Washington last year slapped Korean washing machines with antidumping tariffs, which Seoul is now challenging at the WTO.
Source: The Wall Street Journal
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