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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Sangjin] A U.S. court has intervened in a decision by the U.S. Department of Commerce to impose a 1.1% countervailing duty on steel plates exported from Hyundai Steel and Dongkuk Steel, ruling that the low electricity prices in Korea do not qualify as subsidies for the steel industry. This decision has alleviated concerns for the two companies.
On December 17, the South Korean Ministry of Trade, Industry and Energy announced that the U.S. Court of International Trade (CIT) had ordered the U.S. Department of Commerce to reconsider its decision after Hyundai Steel filed a lawsuit arguing that the countervailing duties were unjustified. The CIT requested that the U.S. Commerce Department amend its judgment and resubmit it for further review.
Countervailing duties are imposed when a foreign country provides subsidies (directly or indirectly) to a particular industry or product, which could harm the importing country's industry. In this case, the U.S. Department of Commerce had argued that Korea's low electricity prices amounted to a subsidy for the steel industry, and they planned to apply a countervailing duty on steel plates exported to the U.S.
The court, however, sided with Korea, agreeing that the U.S. Department of Commerce's determination was unreasonable because it did not consider whether the subsidies were specific to certain companies or industries. The U.S. Commerce Department had initially claimed that the electricity consumption in the steel sector was disproportionately high, thus justifying the duty, but the court rejected this argument.
Following this ruling, the U.S. Department of Commerce is required to revise its determination regarding the "specificity" of the subsidy within 90 days and resubmit it to the court.
The South Korean government has been actively supporting Hyundai Steel and Dongkuk Steel in this case, working closely with domestic and international law firms to develop new defense strategies. The government stated that it would continue to fight the issue of electricity-related countervailing duties in future proceedings.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
