Korea on alert after US Commerce Dept proposes wide-ranging tariffs on steel imports

South Korean steel exporters to the United States are at risk of being hit hard by higher import tariffs as the country’s commerce department recommended that President Donald Trump impose steep curbs on steel and aluminum imports to protect the U.S. interests.

The U.S. Department of Commerce last Friday proposed that the Trump Administration impose heavy tariffs or quotas on steel and aluminum imports from countries including China, Brazil and South Korea. “The Department of Commerce found that the quantities and circumstances of steel and aluminum imports ‘threaten to impair the national security,’ as defined by Section 232,” the department said in a statement.

Secretary Wilbur Ross recommended Trump consider three alternative remedies - a global tariff of at least 24 percent from all countries, a tariff of at least 53 percent on all steel imports from 12 countries including South Korea, or a quota for all countries equal to 63 percent of each country’s 2017 exports to the U.S. “Each of these remedies is intended to increase domestic steel production from its present 73 percent of capacity to approximately an 80 percent operating rate,” the department said.

Korean steel makers including Posco, Hyundai Steel and SeAH Steel expressed concerns that the additional 53 percent tariff would make it almost impossible for them to export their products to the U.S. market where they are already levied around 80 percent tariffs. The Korean government and local steel producers convened an emergency meeting last Saturday and said that they would ask some of the U.S. state governments to exclude Korean steel makers from the measure in regions where Korean companies run their local operation.

Korea exported 3.5 million tons of steel worth $3.26 billion to the U.S. last year, according to Korea Iron & Steel Association.

The commerce department excluded some of its allies including Canada, Japan and Germany from the list of countries subject to the proposed remedies. Trump is required to make a decision on the proposal by April 11.

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