Governments of S. Korea and Japan to Counteract US Tariff Action

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Last updated at: (Beijing Time) Thursday, March 07, 2002

Governments of S. Korea and Japan to Counteract US Tariff Action

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In response to United States President George W. Bush's decision to slap a maximum 30 percent tariff on steel imports Tuesday, major steel exporters European Union (EU), Japan and S. Korea will take joint action to fight the measure, including filing a lawsuit with the World Trade Organization, setting the stage for a trade war.

The Bush administration issued a protective safeguard measure imposing up to 30% tariffs on five plate products for three years, between 15 to 30% on three rod products, 13 to 15% on two steel pipes, and 8 to 15% on three stainless steel products.

While the former quota system will be applied for slabs, imports exceeding the quota will face the same tariff rates as plates. Washington's safeguard restriction includes most of Korea's major import items such as hot-rolled and cold-rolled plates, steel pipes, and stainless steel wire. As a result, US$800 million of the country's annual US$1.1 billion exports to the United States will be affected by the measure.

The United States has excluded from the measure its NAFTA members, Canada and Mexico, and developing countries that share less than 3% of the country's total import, including Argentina and Thailand. Hot-rolled coil, an intermediate material that Pohang Iron and Steel Corp., the world's largest steel maker, supplies to UPI, its US joint venture, is also exempted from the tariffs.

President Bush said in a statement that he decided to impose safeguard tariffs temporarily to help the US steel industry and workers better cope with the flooding of foreign steel imports. In response, the S. Korean Ministry of Foreign Affairs and Trade, and Commerce, Industry, and Energy expressed their dismay with Washington's decision to impose the tariffs, saying it represented a dramatically protectionist action.

Both ministries issued a statement, saying, "It was a disappointing decision against the expectations of steel exporters," noting that they are positively considering filing a lawsuit with the WTO. As well, the EU and Japan announced countermeasures and Russia went as far as threatening to ban poultry imports from the United States.

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