Korean Companies Seeking to Increase Production in the U.S.
With the U.S. government having completed its steel tariff negotiations with the European Union, the United Kingdom and Japan, the South Korean government is continuing to call for quota adjustment and tariff improvement in the U.S. political community.
For example, South Korean Trade Minister Yeo Han-koo met with Democratic Congressman Ami Bera on March 30, asking for his and his colleagues’ attention so that South Korean companies can compete fairly in the U.S. steel market.
At present, no tariff is applied to up to 500,000 tons a year when it comes to steel products exported from the United Kingdom to the United States. In addition, tariff rate quota-based tariff reduction is in effect between the United States and the European Union and Japan.
With South Korean steel products predicted to fall behind theirs in terms of price competitiveness, the South Korean government asked for export quota renegotiations. However, the U.S. Department of Commerce turned down the request, saying the renegotiations are not its top priority.
The U.S. export quota that has been applied to South Korean steelmakers since 2018 is 70 percent of the average of their 2015 to 2017 exports to the United States. Their average annual exports to the United States dropped from 3.83 million tons to 2.63 million tons after the implementation of the quota.
South Korean steel pipe suppliers have taken a particular hit. This is because their annual exports to the United States cannot exceed one million tons. These days, they are losing opportunities with international oil prices soaring along with steel pipe demands in the energy and infrastructure sectors. The companies are trying to cope with the situation by increasing local production.