WTO rules against Hynix on tariffs

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WTO rules against Hynix on tariffs

The World Trade Organization’s highest-ranking judges have ruled that U.S. tariffs on Hynix Semiconductor chips can remain in effect, reversing an earlier ruling that had favored the Korean company. Hynix’s share price dropped 0.9 percent to 16,400 won ($16) yesterday after the ruling. A spokeswoman said the decision would not be a significant hardship for Hynix. The United States has imposed punitive duties of 44.3 percent on dynamic random access memory (DRAM) chips made by Hynix since August 2003. The United States argued that the Korean government directed banks to give Hynix loans, which amounted to an unfair subsidy. A WTO panel ruled in December that the tariff violated the trade body’s Agreement on Subsidies and Countervailing Measures; it said the Korean government’s support for restructuring at Hynix since 2000 was not a subsidy. The United States appealed that ruling in March. The WTO Appellate Body announced on Monday, Geneva time, that the panel erred “in failing to examine the [U.S.] evidence in its totality” and “in declining to consider certain evidence on the record of the underlying investigation.” The appellate body did not rule on whether or not the U.S. duties themselves were legitimate; it only found that the lower panel’s standard of review was improper. Korea cannot appeal the ruling. Hynix said the ruling will not be a major problem. “We’ve paid the countervailing duties since 2003, but the amount is very small,” said spokeswoman Kim Ah-young. “Our plant in Eugene, Oregon, produces most of our DRAM chips needed in the United States,” she said. Ms. Kim added that Hynix is also supplying chips to U.S. computer companies’ factories in Southeast Asia, for which the tariffs do not have to be paid. by Park Sung-ha

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