U.S. lifts steel quotas on KoreaU.S. President Donald Trump signed a proclamation relieving Korea of steel export quotas to the United States only five months after their implementation.
Citing a statement by the U.S. Department of Commerce, Trump signed proclamations relieving Korea, Brazil and Argentina from steel quotas and Argentina from an aluminum quota, Reuters reported on Wednesday.
Quota relief is permitted if U.S.-produced steel cannot fulfill demand in the country.
“Due to the shrinking supply and rising price of steel as a result of tariffs and quotas slapped on steel imports, we predict that U.S. companies that need steel to manufacture their products must be struggling,” said an official from Korea’s Ministry of Trade, Industry and Energy. “We believe that the U.S. government decided on the quota relief to help such companies.”
“Companies can apply for product exclusions based on insufficient quantity or quality available from U.S. steel or aluminum producers,” the U.S. Commerce Department said in the statement, as quoted by Reuters. “In such cases, an exclusion from the quota may be granted and no tariff would be owed.”
The announcement comes after Korea received an exemption from higher tariffs on steel exports in March this year, which was agreed to as a part of the revision to the bilateral trade agreement by the two countries.
President Trump ordered 25-percent tariffs on steel imports into the United States, citing Section 232 of the Trade Expansion Act of 1962, which allows the U.S. government to levy import taxes to protect “national security.”
Korea gained relief from the tariffs but received a quota of 70 percent of the annual average steel exports from 2015 to 2017 to the United States, equivalent to about 2.7 tons of steel.
As a result of the proclamation, Korean steelmakers may be able to export certain steel products to the United States without the 25-percent tariffs or the 70-percent quota. This may create opportunities for some steel products, such as steel pipes, that have already reached their quota limits.
“This is a decision that applies to the entire steel industry but does come with a condition,” said a spokesperson from Posco, the largest steelmaker in Korea. “We do expect it to slightly bring down the trade barrier in the industry.”
BY CHOI HYUNG-JO [firstname.lastname@example.org]