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South Korean Automakers Provide Confidential Data to U.S. to Avoid Tariffs
Data Includes Parts Procurement Costs
South Korean Automakers Provide Confidential Data to U.S. to Avoid Tariffs
  • By Jung Suk-yee
  • May 20, 2019, 08:45
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South Korean automakers submitted the data related to their component value chains to the United States government to avoid tariffs.

A high-ranking government source said on May 19 that the United States Department of Commerce told automakers in target countries to submit data related to their component value chains in initiating its investigation for application of Section 232 of the Trade Expansion Act of 1962. Every South Korean automaker submitted the data in order to avoid additional tariffs, he said.

A South Korean automaker also said that it submitted the data directly to the U.S. government, not via the South Korean government, on condition of non-disclosure and that the data includes the names of auto parts suppliers working with it and parts procurement costs.

Component value chain-related data is classified as confidential data for companies in that it can expose their business strategies. The same applies to procurement costs. “We asked companies to submit that type of data with regard to FTAs and industrial strategy planning, yet the companies refused to do so,” said the South Korean government, adding, “This is the first time that South Korean companies provided the data to the outside.”

The U.S. government said in making the request that the submission of the data is necessary for it to determine whether foreign companies threaten the security of the United States. Its stance is that large-scale auto parts procurement from countries other than the United States leads to significant losses on the part of American companies and the losses can result in national security infringement.