South Korea Authorized to Retaliate by WTO Against US AD/CV Duties

Seven years after the U.S. imposed antidumping and countervailing duties on South Korean large residential washers, the World Trade Organization has given South Korea the go-ahead to retaliate on American exports up to $84.81 million, just over a tenth of what the country had sought.

The arbitrator's ruling came Feb. 8. The retaliation was authorized because even though the U.S. lost its case in 2016, and said it would implement the Dispute Settlement Body's ruling, it did not do so by its deadline of Dec. 26, 2017. Commerce Department officials did not respond by press time on why the U.S. did not comply.

Originally, in 2012, the Commerce Department found that antidumping duties of 79 percent were warranted on Daewoo products, 13 percent on LG products, and 9 percent on Samsung products. Daewoo had a countervailing duty rate of 70.58 percent, and the other two countries had no CVD because the findings were de minimis.

Panelists at the WTO said that the Commerce Department ignored prices that did not support the dumping argument. The WTO calls this "systemic disregarding" where sales within a pattern are evaluated one way, and other sales are run through two different methodologies -- weighted average-to-weighted average or transaction-to-transaction -- and when the transaction-to-transaction formula doesn't add up to dumping duties, that methodology is disregarded. It's colloquially known as "zeroing."

The WTO panel also said the Commerce Department wrongly attributed certain South Korean subsidies to all of Samsung's products when they were only for digital appliances. Moreover, it attributed other subsidies to Samsung's Korean production, when in fact those were distributed to factories around the world. So, the appellate body found that the U.S. levied countervailing duties larger than the subsidization margin.

The South Korean embassy did not respond by press time on when it might raise tariffs.