South Korean steelmaker SeAH Steel Corp.'s U.S. unit has asked Washington for a waiver from Section 232 of the Trade Expansion Act, citing the need to import product to meet market demand, corporate sources said Sunday.
The Houston-based company, which was acquired by SeAH for over US$100 million in 2016, claimed it can locally only make three types of products and cannot meet the requirements of its clients without imports of oil country tubular goods (OCTG).
OCTG is a product used primarily by the oil and gas industries in drilling and extraction operations for lining the casing of oil wells, as well as for the tubing that delivers oil and gas to the surface.
The formal request, made by the steel producer to the U.S. commerce department and reported by Federal Register, asks Washington to exempt 14 oil well tubing and casing products amounting to 135,000 tons that are in high demand in the North American market.
The company said there is growing demand for such products in the United States amid a rise in oil drilling and that failure to meet the demand could result in missed opportunities.
It then said that the company had planned to invest an additional $25 million, but due to the quota imposed, it may not be able to do so while an overall reduction in business jeopardizes the 178 jobs at its plant.
Besides SeAH, Ohio Coatings Company (OCC) a joint venture of South Korean TCC Steel, also made a request to exclude 36,000 tons of cold rolled products from the Section 232 restrictions. The company imports products from the South Korean steel giant and makes tinplates for the key North American market.
OCC said that it is currently having difficulty getting materials from U.S. steelmakers and could suffer losses unless it imports products from abroad.
Meanwhile, Seoul's Ministry of Trade, Industry and Energy said Washington has not accepted any waivers from countries that agreed to an export quota in place of a 25 percent tariff. The United States said that it can exempt its quota for products that need to be imported and on national security grounds.
South Korea and the United States reached an agreement that limited Seoul's steel exports to 2.68 million tons per year in exchange for granting exemptions to stiff import duties. The quota amounts to 70 percent of average of steel exports to the U.S. over the last three years. (Yonhap News)