US imposes 40% anti-dumping duties on Korean steel imports

By Lee Min-hyung

The United States Department of Commerce has raised the anti-dumping duties on Korean steel imports from the previous 10.09 percent to 40.8 percent, citing an error in adjusting the won-dollar exchange rate.

The latest decision came about a month after the department imposed a 10.09 percent preliminary tariff on Korean steel products in October. The department explained it did not convert the Korean won to U.S. dollars while calculating the anti-dumping tariff rate.

“We are amending the preliminary determination of sales at less-than-fair-value for wire rod from Korea to reflect the correction of an administrative error made in the margin calculation for POSCO,” the Washington-based authority said in a statement last week.

The decision came after a group of U.S. steelmakers called for the authority to amend the previous determination and rectify the tariff rate on the Korean steelmakers’ carbon and alloy steel wire rods in consideration of the error.

Ever since the U.S. authority announced the preliminary tariff in October, the U.S. steelmakers have urged the department to slap an anti-subsidy tariff of around 40 percent on the Korea’s top steelmaker and all other Korean steel makers.

Specifically, the U.S. firms claimed the department should impose an anti-dumping tariff of around 33.96 percent to 43.25 percent on the Korean companies.

“Because the preliminary rate was based on the estimated weighted-average dumping margin calculated for POSCO, we are also amending the rate for all others (to 40.8 percent),” the statement said.

The commerce department accepted their request and is expected to make public its final decision around January next year.

The unexpected hike in the tariff is expected to deal a severe blow particularly to POSCO, as the company makes up the bulk of local steel exports to the world’s largest economy.

"The latest decision from the authority is not the final one, so we will do the utmost to lower the tariff," a POSCO spokesman said.

Hit hard by the latest decision, POSCO is expected to shift its focus into exporting high-end steel products to the U.S., which are not subject to the 40 percent tariff.

A steel industry source said: “It will be very tough for U.S. companies to replace some of the premium wire rod products manufactured by Korean companies.”

If the U.S. pushes ahead with the tariff hike on such high-end steel products, this will put a serious burden on consumers there, according to the official.