Aftermath of US’ Additional Tariff
South Korean steelmakers are feuding among themselves over the US export quota following Washington’s decision to exempt them from the 25% additional tariff.
The conflict arose as the United States has not provided details of the quota and the companies have different opinions about quota allocation. The companies are unlikely to reach an agreement before the quota is implemented from May 1.
According to industry sources on April 23, the Office of the United States Trade Representative (USTR) has yet to announce its quota by item according to the HS Code. It also has to determine when exports from Korea will begin to be tallied.
“The export limits to be applied to individual steel products should be known for any distribution although a rough framework is already given in the form of 70% of three-year exports,” an official of a steel exporting company said.
Even after guidelines are presented by the United States, an agreement before the date is unlikely since the companies are in a tug of war over allocations as mentioned above. They currently have different views about how to divide the limited export quota, such as whether to divide it based on last year’s exports or the records pertaining to the three most recent years. How to cope with high tariffs on a certain company’s products and its resultant failure to meet its quota is another part to be resolved.
Under the circumstances, uncertainties are mounting over steel exports to the United States. Orders are received four months before shipment in most cases, but the companies currently cannot sign contracts due to the uncertainties about how much they can export.