Korean steelmakers feared to lose ground in US market
Minister of Trade, Industry and Energy Moon Sung-wook, right, poses with U.S. Commerce Secretary Gina Raimondo, during their meeting at the latter's office in Washington, D.C. in this November 2021 file photo. Courtesy of Ministry of Trade, Industry and Energy
UK, EU, Japanese rivals enhance price competitiveness
By Park Jae-hyuk
Korean steelmakers are facing growing concerns that they are lagging behind their British, Japanese and European rivals in the U.S. market as Seoul repeatedly fails to convince Washington to lower its trade barriers, according to industry watchers Thursday.
Under the presidency of Joe Biden, the U.S. reached agreements with the U.K., Japan and the EU to abolish the former Donald Trump administration's Section 232 tariffs on their steel and aluminum products and introduce a tariff-rate quota (TRQ) which allows a lower tariff rate on imports within a specified quantity, while requiring a higher tariff rate on imports exceeding that quantity.
When Trump had imposed the Section 232 tariffs to protect the American steel industry, Korea was able to avoid excessively high tariffs as it accepted a quota that limits its steel exports to 70 percent of the average between 2015 and 2017. As a result, Korea's annual steel exports to the U.S. dropped to 2 million tons from 3.83 million tons.
After the Biden administration started cutting tariffs on steel products from other countries, Korea asked the U.S. to renegotiate its import quota. However, the U.S. has remained skeptical about Korea's request.
U.S. Commerce Secretary Gina Raimondo told Reuters that her country has no plans to renegotiate a quota agreement with Korea, during an interview on Wednesday (local time), a day after agreeing to cut tariffs on British steel and aluminum imports.
“They kind of struck their own deal in the last administration, with a quota arrangement, so renegotiating that is not a high priority for us now,” she said.
Last week, U.S. Trade Representative Ambassador Katherine Tai also reiterated that a renegotiation of the import quota on Korean steel products is unnecessary, despite her meeting with Trade Minister Yeo Han-koo in the U.S. in celebration of the 10th anniversary of the Korea-U.S. Free Trade Agreement.
Korean steelmakers have remained cautious about making official comments on this issue, but they have continued to express concerns about rival steelmakers possessing more price competitiveness in the U.S. market.
“If the European and Japanese steelmakers began exporting larger amounts of steel products to the U.S., they could be considered more attractive to buyers there,” a steelmaking industry insider said.
The Ministry of Trade, Industry and Energy claimed that the latest agreement between the U.S. and the U.K. will have a limited impact on Korean steelmakers. During Wednesday's meeting with representatives from steel product exporters, the ministry reiterated that the government will continue to talk the U.S. to allow Korean companies to engage in fair competition in the U.S. market.