U.S. has expanded its trade pressure on steel followed by washing machine and solar cell. It is expected that U.S. Government will soon carry out strict regulations that such as import quota and high tariff up to 53% on South Korean steel based on ‘Section 232 of the Trade Expansion Act’. Although South Korean Government emphasized that South Korean steel does not have negative effects on national security to American Government, its effort turned out to be bubble. Some are pointing out that President Trump’s Government has officially started to pressure politics and economy of its ‘ally’ South Korea. Countermeasures from South Korean Government and South Korean businesses towards import regulations carried out by U.S. Government on various types of businesses are urgent as FTA (Free Trade Agreement) between South Korea and the U.S. is set to take place soon.
According to related industries on the 18th, United States Department of Commerce introduced its report on Section 232 of the Trade Expansion Act that suggests higher tariff or import quota on imported steel on the 16th (U.S. time).
This report is based on results of ‘national security impact assessment’ that started last April according to orders from President Trump. Section 232 of the Trade Expansion Act makes limitation on import possible once U.S. Government feels that imported products start to threaten its national security.
Department of Commerce suggested three items and they are imposition of up to 53% of taxes on 12 countries such as South Korea, Brazil, China, Costa Rica, Egypt, India, Malaysia, Russia, South Africa, Thailand, Turkey, and Vietnam, imposition of at least 24% of flat-rate tax on every country, and adjustment of amount of exports from every country to the U.S. to 63% of amount of exports earned in 2017. President Trump is planning to finalize his decision on these items by the 11th of April.
South Korean Government does not have many options. It set up plans to minimize damage that South Korean businesses may suffer such as persuading interest parties from the U.S. and carrying out various solutions such as bringing a lawsuit to WTO (World Trade Organization) at the same time.
Ministry of Trade, Industry and Energy (MOTIE) held a meeting between South Korean Government and South Korean businesses under Minister Baek Woon-kyu on the 17th, when this report was introduced. They even worked to prepare solutions on the 18th, which was the last day of South Korean holiday period.
“It is inevitable that South Korean steel industries and other relevant industries will take hits to their exportations to the U.S. once U.S. Government carries out high tariff on steel according to its new propositions.” said a representative for MOTIE. “We are going to continue to outreach U.S. Government by opening up every possibility and actively consider every solution that may minimize amount of damage.”
South Korean Government is going to carefully consider actions such as bringing lawsuit to WTO. “Possibility of bringing a lawsuit to WTO needs to go through enough legal procedures.” said a representative for MOTIE. “Although we need to carefully examine every facet, we have not finalized anything as of yet. This representative also added that South Korean Government is also going to look into expanding number of demands for South Korean steel through exporting South Korean steel to other countries and limiting amount of imported steel.
Staff Reporter Yang, Jongseok | jsyang@etnews.com