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Korea scrambles ahead of Trump steel decision

Feb 19,2018
The Korean government and local steel companies are scrambling to gauge the potential impact of the U.S. government’s moves to impose steep tariffs on steel and aluminum imports.

The U.S. commerce department recommended Friday that Donald Trump’s administration impose steep curbs on steel and aluminum imports from China and other nations including Korea in a so-called Section 232 investigation, citing risks to the country’s national security.

The Ministry of Trade, Industry and Energy and the heads of major steel companies gathered Saturday to assess the situation and discuss ways to proceed. The participants included chiefs of mid-sized players SeAH Steel, Dongkuk Steel and Husteel as well as larger producers like Posco and Hyundai Steel.

“Until a final decision is made, we will try our best to reach out to the U.S. government, Congress and industry,” a source at the Trade Ministry said.

“At the same time, we will come up with the ways to minimize any damage after considering different scenarios,” the source said.

Of the three options proposed by the commerce department, a targeted 53 percent tariff on steel products from 12 countries including Korea was deemed the worst.

Should the proposal come into effect, Posco, the country’s largest steelmaker, might face over 100 percent tariffs on some products on top of the 60.9 percent countervailing and antidumping duties imposed by the commerce department last year.

The other recommendations include a broad 24 percent tariff on all steel imports and a quota restricting steel imports from all countries to roughly two-thirds the level they were last year.

Trump must respond to the reports by April. The president has yet to say how his administration will act, but many expect tough actions based on Trump’s protectionist views.

“You may have a higher price, but you have jobs,” Trump said in a meeting with lawmakers last week.

Observers expect the Korean government to file a suit with the World Trade Organization if the tariffs hurt the industry.

The Trade Ministry, for instance, brought a steel trade dispute to the international organization last week after the United States levied high punitive tariffs on the country’s steel products.

Last month, Washington slapped steep tariffs on imported washing machines and solar panels in a move to keep American manufacturers competitive, which invited criticism from China and Korea.

The United States was the second-largest export market for Korean steel in 2016. Korea exported 3.5 million tons of steel between January and November last year, down 4.9 percent over a year ago.

In the country-specific measure, other countries include Brazil, China, Costa Rica, Egypt, India, Malaysia, Russia, South Africa, Thailand, Turkey and Vietnam.

While many steel companies in the United States welcomed the move, others expressed caution over possible supply disruptions and price spikes in the main components of automobiles and construction.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]