On March 20, the United States Court of International Trade (USCIT) ruled that the U.S. Commerce Department’s recent decision to impose retaliatory tariffs on POSCO’s cold-rolled steel sheets is legitimate in view of the fact that POSCO did not submit sufficient data but the department’s attempt to apply the highest tariff rate has no ground at all.
“Despite Adverse Facts Available, which allows a high tariff rate to be applied to an investigation object with an insufficient reply, there are certain procedures to follow in calculating the rate,” the USCIT said. The Department of Commerce should recalculate the rate based on the ruling and its 59.72% countervailing duty imposed on POSCO in 2016 is expected to be mitigated.
The U.S. Department of Commerce has applied high tariff rates to South Korean steel products, frequently taking advantage of AFA. However, some limitations of AFA were mentioned by the USCIT’s recent ruling and the department’s decisions regarding a number of South Korean steel companies are likely to be corrected at least to some extent.
“With the Donald Trump administration denying even the authority of the WTO, the ruling of the USCIT has a significant meaning,” said a trade expert, adding, “This is another piece of good news with South Korea expected to be dramatically exempted from Section 232 of the Trade Expansion Act of 1962.”