To Avoid US’ Heavy Tariffs
According to industry sources on March 25, major South Korean steel companies recently decided to reduce the use of materials imported from China to at least maintain their exports to the United States. Last year, South Korean steel companies’ sales in the United States fell 220,000 tons to 3.72 million tons.
The United States, which is already imposing high tariffs on their products, recalculates its retaliatory tariffs on the products each year. This year, it is likely to further raise its retaliatory tariffs on South Korean steel pipes and so on. The U.S. Department of Commerce already raised its tariffs on South Korean oil country tubular goods (OCTG) from 8% to 46% and line pipes from 6% to 19% last year.
Such an aggressive stance is because the U.S. government is thinking that South Korean companies are indirectly exporting steel products manufactured in China. Last year, South Korea was the largest client for Chinese steel with a purchase volume of 12.98 million tons and the third-largest steel exporter for the United States although Chinese steel exported to the United States via South Korea accounted for only 2.4% of South Korea’s total steel exports to the United States.
The South Korean government is expected to benefit from the companies’ determination. At present, the South Korean government is predicting that the U.S. will impose an additional tariff of 25% on South Korean steel due to the transshipment. Still, the South Korean government did not tell the companies to reduce the use of Chinese materials. The U.S. government is going to make a final decision on the additional tariff within this week.