Not Guaranteed but Meaningful
South Korean steelmakers POSCO and Hyundai Steel have applied for exemptions from the U.S. steel quota. If the U.S. Department of Commerce approves the item-specific exemptions, the two Korean steelmakers can export products irrespective of the 70% quota.
According to industry sources, POSCO AAPC, an automotive steel sheet processing center located in Alabama, applied for the exemption, saying that it is currently importing oriented electrical steel sheets for transformer manufacturing from the headquarters of POSCO and the import volume needs to be constant.
POSCO AAPC also said that its procurement from AK Steel, an American supplier, is insufficient. In addition, the company applied for the exemption with regard to steel supplied to U.S. consumer electronics manufacturers, such as stainless steel that LG Electronics U.S.A. is in need of to produce drum washing machines.
Hyundai Steel USA’s application is related to automotive steel sheets supplied to local manufacturing facilities of Hyundai Motor Company, Kia Motors, and auto parts suppliers. “An import restriction is likely to affect the Hyundai Motor Group’s manufacturing activities in the United States,” it explained.
Previously, the steelmakers accepted the quota in order to avoid a 25% tariff. According to the quota, their exports for this year are limited to 70% of the annual averages of their exports from 2015 to 2017.
The approval is not guaranteed yet though. The Department of Commerce listens to the opinions of those against such exceptions as well, and American steel companies such as US Steel and AK Steel are opposed to the exceptions.