Another Way to Restrict Imports

South Korean steel companies are feeling very embarrassed as the South Korean government recently said the U.S. might retroactively apply its steel import restrictions to include the past period of this year.
South Korean steel companies are feeling very embarrassed as the South Korean government recently said the U.S. might retroactively apply its steel import restrictions to include the past period of this year.

This is contrary to their predictions. The companies predicted that the import quota would be calculated from May 1, when the quota becomes effective. Concerns are growing especially among steel pipe manufacturers that increased their exports to the U.S. from the beginning of this year in order to export more before the implementation of the quota. The quota is scheduled to be applied in exchange for exemption of South Korean companies from Section 232 of the Trade Expansion Act of 1962 and the U.S. is about to officially announce its effective date.

South Korean steel companies are feeling very embarrassed with the US government announcement of the effective date around the corner. They anticipated that the effective date would be May 1 as mentioned above because it is the effective date of the additional steel tariffs based on the section of the act.

This is why they exported as much steel as possible to the U.S. for the first four months of this year. In the first quarter, the volume totaled more than US$900 million and 880,000 tons, up 18% from a year ago.

Steel pipe manufacturers are especially sensitive to the quota as their annual exports should be almost halved to 1.04 million tons this year in exchange for zero extra tariff. In the first quarter, their exports to the U.S. totaled US$390 million and 430,000 tons, which are close to the figures recorded during the same period of the previous year. However, they might be unable to export their products to the U.S. in the second half of this year because they are likely to reach the quota with their exports for the first five months of this year alone.

 

 

Copyright © BusinessKorea. Prohibited from unauthorized reproduction and redistribution