SEOUL, Feb. 18 (UPI) — South Korean President Moon Jae-in says Seoul may file a complaint against the United States’ trade protectionist measures to the World Trade Organization.
In a meeting with his key secretaries on Monday, Moon called on the government to “firmly and resolutely” deal with Washington’s measures to protect its homegrown industries by imposing steep tariffs on imported products.
He suggested Seoul officials take the protectionist measures to the WTO, review possible violations of the South Korea-U.S. free trade agreement and raise such issues during the two countries’ negotiations on revising the bilateral trade pact.
This comes after the Department of Commerce on Friday recommended President Trump to impose a 24 percent tariff on all steel imports, or a 53 percent tariff on steel imports from 12 countries including South Korea, Brazil and China.
Another option was to impose a quota on steel and aluminum imports to 63 percent of last year’s level.
Under Section 232 of the 1962 Trade Expansion Act, the U.S. President has the authority to adjust imports, including through the use of tariffs, if excessive foreign imports are deemed a threat to national security.
While top steel exporters to the U.S. such as Japan, Germany, Mexico and Russia were excluded from the extra tariff list, observers believe South Korea has been targeted as its products contain Chinese steel.
The U.S. has long complained that South Korean steel products contain cheap steel produced in China.
“As the U.S. raises a trade dispute with China, it is carefully picking and choosing its friends and enemies,” Deputy Manager of Korea International Trade Association Je Hyun-Jung told Hankook Ilbo.
“The U.S.’s biggest complaint has been imports of Chinese steel rods. South Korea also exports steel rods and has been accused of dumping such products in the U.S. market.”
Since 2014, South Korean steelmakers have reduced their shipments to the U.S. from 5.7 million tons to 3.5 million tons in 2017.
However, U.S.-bound shipments still account for 11.2 percent of total exports, meaning Korean industries will take a significant blow if a 53 percent tariff is imposed.
Also, steelmakers fear that Washington’s trade action could cause other countries to follow suit.
“As the U.S. considers anti-dumping tariffs or other protectionist policies, the European Union and China are already indicating they may do the same. If the U.S. government decides to take this drastic measure, it will likely trigger a wave of protectionism across the world,” a South Korean steel industry insider told E Daily.
The Commerce Department’s recommendations have also sparked sharp criticism at home. Various industry groups have complained steep tariffs would devastate downstream U.S. manufacturers due to higher prices, Xinhua reported.
This could directly affect some 6.5 million American workers employed in steel consuming firms, according to a joint statement issued by the National Tooling and Machining Association and Precision Metalforming Association.
According to Department of Commerce data, South Korean steel accounted for 10.2 percent, or the third largest share of the U.S.’s imported steel market, at the end of October last year.
South Korea’s trade ministry said it will consult the Trump Administration before it decides by April 11 on whether to place trade measures on steel, reminding the U.S. that higher import prices will only hurt the competitiveness of American manufacturers including the automobile industry.
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