Government and Hyundai Steel Win Second Victory in U.S. Electricity Rate Countervailing Duty Lawsuit

Court: "Department of Commerce Repeats Previous Arguments Without Considering Remand Decision"

Hyundai Steel has once again won a lawsuit in the United States regarding countervailing duties related to electricity rates.

According to the Ministry of Trade, Industry and Energy on August 20, the U.S. Court of International Trade (CIT) on August 19 (local time) sided with Hyundai Steel by overturning and remanding the U.S. Department of Commerce's redetermination regarding the subsidy determination on South Korean electricity rates.

This case was filed by Hyundai Steel as the plaintiff, with the Korean government participating as a third party. The key issue was the specificity requirement for electricity rates. The Korean government had already won a first victory in the Hyundai Steel case (countervailing duty rate of 1.08%) on December 17 of last year, and also received a favorable ruling in the POSCO case (0.87%) on August 8 of this year. With this latest ruling, South Korea has achieved two consecutive victories in countervailing duty disputes related to electricity rates.

After the CIT's remand decision in December last year, the U.S. Department of Commerce maintained the imposition of countervailing duties based on the logic of disproportionality. Specifically, it argued that: ▲ the top three industries, including steel, accounted for a greater share of electricity consumption than the top seven industries; ▲ the total electricity consumption of the top three industries exceeded half of the total consumption of the top ten industries; and ▲ the electricity consumption of the top three industries was several times higher than the average of the top ten industries. Based on these points, the Department claimed that the steel industry received disproportionate benefits.

Accordingly, the Department maintained a countervailing duty rate of 1.08% on Hyundai Steel. It also introduced a new grouping method, grouping together three industries with double-digit shares of electricity consumption, instead of the previous method of grouping the top four industries.

The Korean government strongly refuted this by pointing out: ▲ that the Department still relied on absolute figures to calculate shares, instead of using the relative analysis requested by the CIT; ▲ that it repeated the logic that the top three industries used "several times more than the average," based on the unreasonable premise that all industries have the same average electricity consumption; and ▲ that the industry grouping was simply based on having double-digit electricity consumption shares, without presenting any reasonable criteria.

The CIT accepted the Korean government's arguments. The court stated that "the Department offers the same basis without considering the intent of the first remand decision," and pointed out that the Department essentially rejected the ruling. Regarding the grouping logic, the court also found that "no meaningful explanation" was provided. Accordingly, the court dismissed the Department's redetermination on both disproportionality and grouping, issuing a second remand decision.

As a result of this decision, the U.S. Department of Commerce must revise its previous determination regarding the specificity of electricity rates and resubmit it to the CIT within 90 days. The Ministry of Trade, Industry and Energy stated, "We will continue to make every effort to respond to the issue of countervailing duties on electricity rates in the upcoming procedures."

This content was produced with the assistance of AI translation services.