Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The World Trade Organization (WTO) ruled recently in favor of South Korea against the US in a claim involving high tariffs imposed by the latter on steel and power transformer products. 


The US Department of Commerce has been adding tariffs on some South Korean goods since May 2016, which led to South Korea filing the lawsuit in February 2018. An “adverse facts available” (AFA) provision has allowed for the US to place 9.49-59.73pc anti-dumping (AD) and countervailing (CVD) tariffs on companies that do not provide data requested by the US authorities during its investigations. 


Electrical transformer tariffs on South Korea by the US have reached 60.81pc. The new administration is expected to realign its working relationship with the WTO. The decision by the WTO will also limit the use of the AFA in other products. 


South Korea appeals on Japan AD

South Korea also moved to appeal an earlier WTO ruling that it violated AD rules on Japanese stainless-steel bars. Under an AD agreement, the WTO requested that South Korea align the measure in a report two months ago.  


The South Korean AD tariffs on stainless tell bars from Japan, India, and Spain have been in effect since July 2004. Japan finally filed a complaint in 2018 as some products have received tariffs of 15.39pc since 2004. Japan argues that its product is different from South Korean domestic products. Stainless steel bars are used across many industries including automotive and industrial. 


The South Korean appeal though will remain in gridlock as the WTO’s appellate court is presently non-functioning. The matter is not resolved per the Japanese government and it has stated it hoped South Korea will abide by the WTO agreement.

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