South Korea's Trade Ministry is making bold moves to prevent the circumvention of antidumping measures on imported steel, aiming to safeguard the domestic steel industry. Additionally, the ministry is enhancing support to tackle rising trade barriers driven by growing protectionism in the US and the EU.
Trade authorities announced on Sunday that the ministry will incorporate such measures into its upcoming Steel Trade Response Plan, set to be unveiled within March. The strategy aims to prevent dumped steel products from bypassing tariffs through third countries by reinforcing the certification process for crude steel origin.
The Korean steel industry has faced a management crisis as profitability declined for three consecutive years since 2021. Experts attribute this to the global steel market disruption caused by Chinese steelmakers, who continue to export surplus products at low prices despite reduced demand.
In response, the domestic industry filed an antidumping complaint against Chinese heavy plates with the Trade Commission last year, resulting in provisional antidumping duties of up to 38 percent. The Trade Commission is currently investigating Chinese hot-rolled steel sheets and considering whether to initiate investigations into Chinese galvanized color-coated steel sheets.
Despite the provisional tariff decision, concerns persist regarding the potential for circumvention dumping. Last month, the steel industry announced plans to file an antidumping complaint against Chinese galvanized color-coated steel sheets, warning that Chinese steelmakers could "reroute exports" through minimal post-processing to avoid tariffs.
In response, the Trade Ministry plans to reinforce origin certification to verify that the crude steel was produced in Korea, rather than in countries subject to sanctions.
On Jan. 2, the Trade Commission amended the detailed operating regulations on antidumping duty imposition, investigation and determination. This amendment established a legal framework for filing complaints, reviewing applications, submitting opinions and managing investigations related to circumvention dumping.
Leveraging this framework, the government aims to actively combat unfair dumping practices and crack down on the "laundering" of origins through countries like Vietnam and Thailand.
Furthermore, the government is collaborating with relevant ministries to devise support measures, such as tariff and origin certification assistance, for small and medium-sized enterprises that produce steel and aluminum derivative products for export to the US. These measures are expected to help address steel tariffs imposed by major countries, including the US, the EU and India.
In particular, the government is exploring negotiation strategies with the US to secure tariff exemptions for steel products, such as automotive steel sheets, as requested by the Korean steel industry.
Meanwhile, the government is also closely monitoring local developments, including a recent opinion letter submitted by the US steel industry to the US Trade Representative, which called for the imposition of at least a 25 percent additional tariff on Korean steel. The US steel industry claims that the Korean government subsidizes Korean steelmakers through loans, financial support, tax exemptions and electricity rate discounts.
hykim@heraldcorp.com
