The U.S. Department of Commerce has called the South Korean government’s electricity price calculation method into question again during its anti-dumping determination on plated steel sheets imported from South Korea. The department’s stance is that Korea Electric Power Corp. (KEPCO), a state-run company, is the sole supplier of electricity in South Korea and, as such, the South Korean government can help South Korean steelmakers by applying a low electricity price.
The department is being criticized as being self-contradictory. In imposing a countervailing duty on South Korean steel pipes four years ago, the department determined that the electricity price was not problematic because KEPCO set the price in the same way as the others based on data from an external independent accounting firm. The department’s current stance is what ignores a U.S. court ruling itself, too. The U.S. Court of International Trade ruled in 2017 that the price was not problematic at all.
Besides, the department determined that South Korean steel is distorted in price regarding Particular Market Situations (PMS) such as a massive import of cheap Chinese steel. Industry insiders point out that the department has gone too far to protect the U.S. steel industry. In calculating anti-dumping duty rates, the department calculates the difference between the prices of steel a non-U.S. steel exporter applies to its domestic market and the U.S. market. The department applies the PMS once it determines that normal price calculation is impossible with the company’s data due to particular situations of the country the exporter belongs to.
In this case, the department can set a tariff rate at its discretion. Back in 2017, NTC Director Peter Navarro even sent a letter to the department in order to urge it to apply the PMS and impose a tariff of at least 36 percent on South Korean steel so that the U.S. steel industry can be protected.
In the meantime, a local industry insider mentioned that the department imposed no additional tariff despite the recent electricity price argument and the argument is unlikely to affect South Korean steelmakers.