Against Punitive Tariffs

The U.S. Department of Commerce is taking advantage of adverse facts available (AFA), which is regarded as highly arbitrary.
The U.S. Department of Commerce is taking advantage of adverse facts available (AFA), which is regarded as highly arbitrary.

 

The South Korean government decided to file a suit with the World Trade Organization (WTO) if the United States continues to impose excessive punitive tariffs on exported products. This is because losses of South Korean companies that can be attributed to trade protectionism are soaring.

In 2016 alone, South Korean companies had to face such tariffs in four out of five original anti-dumping rulings as the U.S. Department of Commerce took advantage of adverse facts available (AFA), which is regarded as highly arbitrary. The average tariff rate of the four cases amounted to 43.62%. This year, ferrovanadium, synthetic rubber, and transformers exported by South Korean companies have been subject to 54.69%, 44.3% and 60.81% tariffs. Besides, similar tariffs are likely to be imposed on thick plates and oil country tubular goods on March 30 and 31, respectively.

Fortunately though, an increasing number of countries around the world are expressing their opposition to the United States’ strengthened anti-dumping regulations these days. For examples, Canada, Brazil and Turkey recently filed suits with the WTO, claiming that excessive tariffs based on the AFA and its arbitrary determination of the degree of sincerity of companies cooperating with its anti-dumping investigations are not without problems.

“The AFA is characterized by demanding an excessive amount of data in anti-dumping probes and the amount is something that cannot be responded to by almost all companies,” said a local university professor, adding, “It makes sense for the South Korean government to file such a suit.”

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