On March 12, the U.S. Department of Commerce adjusted its anti-dumping and countervailing duty, from 2.99% to 60.81%, on Hyosung’s large transformers exported for one year from August 2015. Hyosung accounts for approximately 30% of South Korea’s total transformer exports to the United States, around US$200 million a year, and the company has to pay about 50 billion won for the adjustment. A similar adjustment has already been applied to Hyundai Electric, which is the largest among South Korean companies exporting transformers to the United States.
In spite of the exporters’ efforts to avoid high import duties, the U.S. government is haunting them with Adverse Facts Available (AFA). The biggest problem with AFA is that the companies’ sincerity during investigations was determined by none other than the Department of Commerce. According to those in the industry, the department has demanded trade secrets and caused inadequate replies during its investigations.
During its investigation on Hyundai Electric, for instance, the department demanded data on production costs related to transformer components without mentioning any specific component. “We had no way to find out which components were in question and we had to reply in a hurry,” Hyundai Electric said, adding, “Then, the department imposed high import duties, saying that our reply was not what they sought.”
Under the circumstances, Hyundai Electric is going to file a suit with the U.S. Court of International Trade. The thing is, it takes about two years for the court to make a ruling.