US to decide on tariffs over POSCO
POSCO vows not to sit idly against ultra-high taxes
POSCO is nervously waiting a decision by the U.S. Department of Commerce (DOC) on anti-subsidy tariffs on the Korean steelmaker’s cut-to-length (CTL) plates, March 30.
Last September, the DOC calculated a preliminary subsidy rate of merely 0.62 percent for POSCO plates. But the rate may skyrocket in a final determination, which was the case twice for hot-rolled and cold-rolled products from POSCO.
Early last year, the DOC initially levied negligible countervailing duties on POSCO’s cold- and hot-rolled steel products, but the eventual figures surged to 58.4 percent and 57.04 percent respectively in separate cases. The duties are used when an exporter gets unfair government support.
On a more negative note, the POSCO case will mark the first major trade-related judgment of the Donald Trump administration, which is feared to tilt toward protectionism. Originally, the DOC was scheduled to make the determination during the waning days of former President Barack Obama’s term in mid-January but was delayed to this month for unknown reasons.
This time around, POSCO has vowed not to sit idly — its chief said that POSCO will bring the case to the World Trade Organization (WTO) if the DOC imposes heavy countervailing duties once again.
“Last year, the U.S. government decided to levy countervailing duties of nearly 60 percent on both our cold- and hot-rolled steel products in its final determination. The decision is practically an embargo on importing POSCO products into the country,” POSCO CEO Kwon Oh-joon said during a press conference after the general shareholders’ meeting, March 10.
“If the DOC decides to levy similar duties in its final determination on our CTL plates as high as it did with our cold- and hot-rolled steel products, we will take the case to the WTO.”
CTL plates are used for many purposes, including structural and construction applications, pressure vessels and marine engineering. Korea’s steelmakers export about 300,000 metric tons of CTL plates to the U.S. annually, which is worth around $210 million. Of them, POSCO produces around 270,000 tons, or 90 percent.
The DOC attributed the differences between preliminary and final determinations to a lack of cooperation from POSCO, claiming that the Korean steelmaker “did not act to the best of its ability to comply with requests for information.”
Observers point out that the atmosphere is not so good after U.S. National Trade Council Director Peter Navarro recently made a request with the DOC to increase the margin by at least 36 percent on steel oil pipe products imported from Korea.
A series of the U.S. government’s duties imposed on Korean steel products is adding concerns that Korean firms may fall victim to the Trump administration’s trade protectionism.
POSCO expects it will not face something like 60-percent tariffs this time.
“We provided all the information in line with the requests of the DOC. Hence, we hope the DOC’s final determinations will reflect that,” a POSCO official said. “POSCO has done its utmost in reviewing related risks over the final determination.”
The Korean government said it is monitoring the case closely and will settle the issue through dialogue.
“In the past, the U.S. government’s preliminary and final decisions on steel products were almost the same. Hence, our companies might be somewhat complacent in answering the questions of the DOC, which we understand led to the high tariffs on POSCO products in the previous two cases,” a senior official from the Ministry of Trade, Industry and Energy said.
“As far as I know, POSCO sincerely cooperated with the DOC for the investigation of CTL plates. Accordingly, we expect the results would be more favorable for POSCO this month.”