South Korea has become ensnared in the United States’ trade war with China.
On Feb. 16, the U.S. Commerce Department released recommendations for President Donald Trump to impose tariffs on at least 54 percent on steel imports from 12 countries, including China, South Korea, Brazil, Russia, Thailand, Turkey, and Vietnam.
The proposal was part of an investigation authorized by Trump to examine the national security impact of imported steel and aluminum products. The president now has until April 11 to make a decision on the steel imports.
The U.S. is currently the world’s largest steel importer, buying nearly 40 percent of shipments from Canada, Brazil, and South Korea. While China was not among the top 10 sources of U.S. steel imports in January to September 2017, the Commerce Department has accused China of dumping steel—selling it at artificially low prices, thus hurting domestic steelmakers.
It also found that South Korea often imported China’s cheap, government-subsidized steel, processed it, and then dumped it in the U.S.
South Korea is the world’s biggest buyer of Chinese steel. In 2016 and 2017 between January to October, South Korea imported 14.22 million tons and 10.95 million tons, respectively, according to the Commerce Department.
U.S. steel companies have long been concerned about South Korean steel, and in 2014, urged U.S. authorities to impose tariffs due to the country’s processing of Chinese steel, according to a Wall Street Journal report.
South Korea is the only U.S. ally listed in the group of recommended countries.
For its part, China’s Commerce Ministry denied accusations of dumping and said the country will consider countermeasures in retaliation.
South Korea, meanwhile, said that since last year it has significantly reduced its imports of Chinese steel, according to JoongAng Ilbo, a South Korean newspaper.
South Korean steel industry representatives also worried that if the U.S. were to impose tariffs, the industry would no longer be able to export steel to the U.S.
Steel wire rods ready to be loaded onto a ship at the port. Seong Joon Cho/Worldsteel via Getty Images
Je Hyun-jung, a researcher at the Korea International Trade Association, a nonprofit trade group, told South Korean newspaper Hankook Ilbo that the U.S.’s trade recommendations were clearly aimed at China, “but Korea now has to get drawn into [the dispute],” he said.
Tensions have been building between the U.S. and China. In January, Trump vowed to enact a fine for China’s practices of intellectual property theft. Last month, the administration imposed tariffs on imported solar panels and washing machines. China dominates much of the world’s solar panel manufacturing.
Last week, Japanese newspaper Yomiuri Shimbun reported that the U.S., along with Japan and the E.U., is considering filing a complaint against China at the World Trade Organization, for China’s unfair policies toward foreign firms doing business there.
Reuters contributed to this report. Hong Mei of The Epoch Times contributed to this report.
