Seoul: The U.S. Court of International Trade (CIT) has ruled in favor of South Korean steel giant POSCO in a suit against the United States' imposition of countervailing duties on the company, Seoul's industry ministry said Wednesday.
According to Yonhap News Agency, in December 2023, the U.S. Department of Commerce imposed 0.87 percent countervailing tariffs on POSCO's carbon and alloy steel plates. The department argued that the Korean company was selling its products at low prices in the U.S. market, allegedly due to government subsidies.
The commerce department claimed that Korea's low industrial electricity rates acted as a government subsidy for companies, asserting that the country's steel, semiconductor, and petrochemical industries consumed large amounts of electricity to benefit from these rates. It also suggested that the Korean government provided extra carbon emission permits to POSCO, viewing this as a countervailable subsidy.
The CIT refuted Washington's argument, indicating that a company's heavy electricity usage does not equate to receiving a "disproportionate" subsidy. The court noted that the U.S. department "unreasonably" grouped steel with unrelated industries, according to the ministry.
The ministry reported that the CIT accepted the Korean side's argument that extra permits within the carbon emissions trading system do not represent a forfeiture of government revenue. It clarified that the Korean government did not allocate additional permits to any specific enterprise or industry.
Following the court's decision, the U.S. commerce department is required to reconsider its determination concerning the specificity of Korea's electricity subsidy and POSCO's extra emissions permits. The department must submit its revision to the CIT within 60 days of the ruling.