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Tokyo, Seoul seek US steel tariff exemption: Correction

02 Mar 2018 09:07 GMT
Tokyo, Seoul seek US steel tariff exemption: Correction

Corrects market share and attribution in paragraph 2

Singapore, 2 March (Argus) — Japan and South Korea will make a last-minute plea to the US Trump administration to exempt them from a planned 25pc import duty on steel.

The two countries accounted for 15pc of US steel product imports last year with a combined 5.12mn t, according to US census data.

President Donald Trump yesterday said he will sign into law an import duty of 25pc on steel and 10pc on aluminium next week, moving to counter an "unfair" global trading system that has battered the American steel and aluminium industries, costing thousands of jobs over two decades.

Higher import duty on US steel could divert a large portion of the volumes to emerging Asian markets such as Vietnam, Thailand, the Philippines and Indonesia, pressuring export prices and cutting into market share of China, the leading steel supplier to southeast Asian countries.

South Korea's commerce, industry and energy ministry has engaged with the US government since 2 June to stave off any import duty on South Korean steel exports. On 25 February South Korea's trade negotiator Kim Hyun-chong met with the chairman of the White House National Economic Committee Gary Cohn and commerce secretary Wilbur Ross and "urged the US side to adopt measures to minimise the damage to South Korean steel enterprises".

"We will also actively pursue US outreach activities before the US government makes its final decision," said the ministry.

"Steel and aluminium exports from Japan, which is a US ally, should not pose any threat to US national security. I wish to convey this message to Washington," said Japan's commerce minister Hiroshike Sego. Japan will also wait for details of the tariff notification, such as which countries will be included in the tariff net. The US Department of Commerce has tried to make a case that national security has a strong link with protecting and promoting the domestic steel industry.

There has been no official statements from China and India's governments on the proposed US tariff.

Japan shipped 1.72mn t of steel products to the US in 2017, making it the sixth-largest steel exporter, according to US data. South Korea exported 3.4mn t of steel products to the US, making it the third-largest supplier.

China and India exported less than 1mn t each in 2017 and are unlikely to see much impact on steel output and sales from the US move. China's steel exports to the US were at 740,126t in 2017, while India exported around 743,020t.

The US Department of Commerce steel trade data includes steel pipes and tubes, which falls in a separate customs code 73, along with all other steel products that are included in the customs data classification 72.