In July, the U.S. Department of Commerce placed anti-dumping duties on steel tubes imported from South Korea, adding 15.75 percent on the price of steel products from Hyundai, 9.89 percent for Nexteel, and 12.82 percent for other South Korean producers. Recognizing both the country’s heavy reliance on exports and the growing demand for steel pipes amidst America’s oil boom, Seoul sought mediation at the United States’ Court of International Trade. However, the court ultimately ruled in favor of the duties on August 22.
On the surface, this appears to be a simple trade dispute, one South Korea is prone to encounter due to its massive export of goods that have insignificant demand at home, rendering the assessment of a fair market price difficult for regulators. But digging deeper, it becomes readily apparent that this most recent disagreement was merely the tip of the iceberg, hinting at a more fundamental problem affecting commerce in the Asia-Pacific region.
Some American economists criticized the Department of Commerce for pursuing a policy protecting domestic steelmakers, thereby blocking cheaper inputs from South Korean producers and diminishing the overall productivity of the U.S. economy. While this argument hits on several apt points, it ignores existing imbalances in the trans-Pacific commerce, which Washington is attempting to rectify.