BUSINESS

Korea expresses regrets over US steel tariffs, mulls WTO complaint

By Yonhap
  • Published : Mar 9, 2018 - 09:54
  • Updated : Mar 9, 2018 - 15:01
South Korea's trade minister on Friday expressed regret over the decision by the United States to slap stiff tariffs on steel imports, saying the nation will consider filing a complaint with the World Trade Organization if it is not exempted.

Paik Un-gyu, minister of trade, industry and energy, made the remark after US President Donald Trump ordered new tariffs of 25 percent be slapped on all steel imports with the temporary exception of those coming from Canada and Mexico.

"We express regret over the US government's decision to impose tariffs on imported steel even though the Korean government has pointed out the problems of this action through various channels," Paik said in a meeting with senior officials from Korean steelmakers. "If this action takes effect, it would inevitably deal a serious blow to South Korea's steel exports to the US."

Paik Un-gyu, minister of trade, industry and energy, speaks during a meeting with senior officials from Korean steelmakers at the Convention and Exhibition Center in Seoul on March 9. (Yonhap)

South Korea shipped 3.6 million tons of steel products to the US last year, making in the No. 3 steel exporter after Canada and Brazil, according to the US Department of Commerce.

Jeong Tak, executive vice president at South Korea's leading steelmaker POSCO, said the US decision would deal a blow to the country's steel exports to the US, and that South Korean steel firms need to work together with the government to cope with challenges.

"US partners would question the wisdom of continuing to buy South Korean steel products if tariffs are put in place," Park Hoon, CEO of Husteel Co. told reporters on the sidelines of the meeting. "There is no other way but to ask the US to give South Korean steel companies a break."

Seoul has repeatedly asked the Trump administration to exempt it from the steep tariffs, citing close economic and security ties between the two nations. Kim Hyun-chong, the key man on trade policy, has been in Washington, D.C. for closed meetings with senior American officials and policymakers in the runup to the formal announcement.

Paik said the Korean government will continue to consult with the Trump administration to get an exemption or exclude some products from the high duties, while looking for ways to challenge the move at the WTO if its demands are not accepted.

The US Trade Representative will handle negotiations with countries seeking an exemption, while the US Commerce Department will review requests for exclusion of specific products if the country lacks sufficient domestic capacity or for national security considerations.

The Korean government said it will closely consult with the USTR to discuss ways to get an exemption ahead of the duty implementation, while working with local steelmakers to get an exclusion for certain products.

"In parallel with the state-level effort, I ask for Korean companies to reach out to American clients and policymakers to secure the list of products that should be excluded," Paik said.

"We will also actively consider taking group action with other countries affected by the latest move."

With the new tariffs set to take effect in 15 days, Trump left room for exemptions for other countries, saying, "I'll have a right to drop out countries or add countries. I just want fairness."

South Korea is expected to bring up the steel tariffs in upcoming talks to revamp the free trade agreement, as Trump temporarily exempted Canada and Mexico from the tariffs in hopes of getting a better deal for a new North American Free Trade Agreement.

"As (the US steel) tariffs are imposed while the two-way South Korea and US FTA renegotiations are under way, we will consult with the US to minimize their impact (on South Korean companies)," Paik told reporters ahead of the meeting.

Talks are currently under way to arrange the third round of meetings in Washington, the ministry said.

In the second meeting, Seoul complained about rising US trade remedies, including steep safeguard duties on its washers and solar panels, while American negotiators called for an easing of regulations on the auto sector to reduce its trade deficit.

The government will also make concerted efforts with trade promotion agencies and state-run utility firms to diversify the export market while pushing for large infrastructure projects to boost domestic consumption of steel products.

"In the long term, we will push for development of high-value added materials to restructure the steel industry and provide incentives to local companies to raise their competitiveness," Paik said.

Experts say oil country tubular goods will be affected most by the new duties, as these products are specially designed for oil and gas drilling in extreme environments and are heavily dependent on the US market.

OCTG is one of the fastest growing sectors in the pipelines market, and South Korean producers have enjoyed a boom in the North American country's oil and gas industry in recent years.

Steel pipes accounted for 57 percent of South Korean steel exports to the US in 2017, followed by steel plates with 32.2 percent, according to Seoul's trade ministry.

Industry officials say the new duties, in addition to the incumbent tariffs, would sharply raise prices of South Korean exports, hurting their price competitiveness against American manufacturers. (Yonhap)

LEADERS CLUB