U.S. exempts Korea from steel tariffsKorea was formally exempted from new U.S. tariffs on imported steel and aluminum that went into effect May 1 - the only country to get a pass from the Donald Trump administration.
The White House claimed that Korea was exempted because its steel trade no longer threatened national security, the rationale for the Trump’s government’s new tariffs.
Last year, Korea was the third-largest exporter of steel to the United States.
“Today, President Donald J. Trump issued two proclamations authorizing modifications of the Section 232 tariffs on steel and aluminum,” the White House said in a statement on Monday.
“The Administration has reached a final agreement with South Korea on steel imports, the outlines of which were previously announced by U.S. Trade Representative Robert Lighthizer and Republic of Korea Minister for Trade Hyun-chong Kim.”
In a statement, Trump said he excluded Korea from the tariff proclaimed in Proclamation 9705 as “steel articles imports from South Korea will no longer threaten to impair the national security.”
However, the exemption comes at a cost: Korea’s steel exports to the U.S. will be capped at 70 percent of the average volume between 2015 and 2017, or 2.68 million tons, according to the Korean government.
“In my judgment, these measures will provide an effective, long-term alternative means to address South Korea’s contribution to the threatened impairment to our national security by restraining steel articles exports to the United States from South Korea, limiting transshipment, and discouraging excess capacity and excess steel production,” Trump said.
Korea’s exemption was first announced in late March after Trade Ministry representatives and U.S. trade representatives reached an agreement on revising the Korea-U.S. free trade agreement. The revisions opened up Korea’s car market to U.S. exports.
Stock markets were closed on Tuesday for Labor Day, but steel stocks rallied on Monday.
Korea’s largest steel manufacturer, Posco, closed 12.64 percent higher than on Friday, switching places with Samsung Biologics as the sixth-largest company on the Kospi by market cap.
Hyundai Steel rose 12.64 percent, Dongkuk Steel gained 10.11 percent and SeAH Steel rose 9.79 percent.
While Korea was the only country given a permanent exemption, there were three countries that reached temporary agreements with the U.S.
“The Administration has also reached agreements in principle with Argentina, Australia and Brazil with respect to steel and aluminum, the details of which will be finalized shortly,” the proclamation stated.
Canada and Mexico, which were the first two countries that were considered likely to be exempted, as well as the European Union were given 30 days for negotiation.
BY LEE HO-JEONG [firstname.lastname@example.org]