Why POSCO Welcomes the U.S. Court's Tariff Ruling
by Cho Seongpill
Pubilshed 14 Aug.2025 10:22(KST)
Updated 14 Aug.2025 13:41(KST)
U.S. Court of International Trade Orders Review of 0.87% Countervailing Duty
"Weakened Rationale for 'Electricity as Subsidy'"
Electricity Rate Reductions for Korean Steel Industry Gain Momentum
The U.S. Department of Commerce had effectively considered preferential electricity rates as a subsidy and imposed countervailing duties on POSCO. However, the U.S. Court of International Trade (CIT) has ordered a review, citing insufficient grounds for the decision. The countervailing duty imposed was 0.87%, which POSCO is now set to recover. Within the industry, where companies face the high barrier of tariffs exceeding 50%, the response has been, "Even a 1% reduction in burden is significant," and there is growing anticipation that this ruling could pave the way for future electricity rate reductions.
According to industry sources on August 14, the CIT recently ruled in favor of the plaintiff in a lawsuit filed by POSCO, which challenged the 0.87% countervailing duty imposed by the U.S. Department of Commerce in December 2023. Previously, the Department of Commerce determined that industrial electricity provided to the steel industry, which exports carbon alloy and heavy plate, was specific and therefore constituted a subsidy, retroactively applying the tariff to sales during the relevant period. POSCO contested this action in court, and with this ruling, there is now a possibility that the company will be reimbursed for the duties paid in the past.
The industry has responded that, amid a sharp increase in tariff burdens, even a minor reduction is meaningful. A 1% tariff can affect price competitiveness, and this ruling has reduced the likelihood of a "50%+α" scenario. An industry representative commented, "While a 1% share may not seem large, the cumulative impact of such burdens can be significant, so blocking this is meaningful."
Another reason for welcoming this ruling is that the recently proposed "Special Act on Strengthening the Competitiveness of the Steel Industry and Transition to Carbon Neutrality" in the National Assembly includes measures to ease electricity costs and support power infrastructure. Even if the bill passes and electricity subsidies are expanded, observers note that this ruling will make it more difficult for the U.S. to justify imposing similar countervailing duties in the future.
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