Japan/Korea trade war soon?

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As if 2020 has not had enough bad news – it appears South Korea and Japan are heading towards a trade war stemming from events that happened in WW2. The tense relations between the two nations results from a wartime labor compensation issue stemming from Japan’s forced labor during their colonial occupation of Korea and a focus on Japan’s use of “comfort women” during WW2.

In 2018, a court in South Korea seized assets from Mitsubishi Heavy Industries Limited and Japan’s Nippon Steel and Sumitomo Metal Corporation in order to compensate forced laborers and comfort women during Japanese colonial rule of Korea from 1910-1945. While we think assets include something tangible, in this instance the assets were stock shares from a joint venture between a Japanese and Korean company with a value of approximately $800,000.

In response to the court decision that would seize the assets, Japan made it more difficult for South Korea to import chemicals needed for semiconductor manufacturing. In response, South Korea took Japan off their “white list” nation of countries with favorable trade terms while South Korean citizens also started a boycott of Japanese goods.

A dispute likely won’t be coming to a resolution soon – South Korea claims Japan has never apologized and refuses to compensate the victims where as Japan claims South Koreans were compensated in 1965.

The next deadline is August 4th, when the South Korean court considers the Japanese parties have been served with the notice of damages paperwork and the liquidation process can begin.

Potential antidumping duties on tires from Korea, Taiwan, Thailand and Vietnam?

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On May 13, 2020, The United Steelworkers (USW) union announced they were filing antidumping and countervailing duty petitions on passenger vehicle and light truck (PVLT) tires from Korea, Taiwan, Thailand and Vietnam.

The petition by the USW claims tires from the 4 countries are “dumped” into the US after being made at a much cheaper cost than can be produced by US manufacturers. Potential dumping margins listed in the petition range from as low as 33% to 217%. As you are aware, the USW previously obtained AD/CVD orders on PVLT tires from China in 2015 that led to a drastic reduction of Chinese tire imports. However, the AD/CVD orders had the indirect impact of shifting tire manufacturing to Korea, Taiwan, Thailand and Vietnam.

The full press release can be found here.

If you have any questions on how the potential antidumping and countervailing duties will impact your business, contact trade attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com.