The Korea International Trade Association said Wednesday it has submitted an official opinion to the US Department of Commerce to exclude Korean electric transformers from its investigation on imported transformers and parts.

According to the business association, the US launched an investigation into imported transformers and parts, viewing them as national security threats under Article 232 of the Trade Expansion Act. Imports make up around 85 percent of transformer and relevant parts supplies in the US. The investigation was launched as there were radical surges in transformer imports from Mexico and Canada which the administration suspects are related to its tariffs on steel imports since March 2018. It suspects that some of the electric steel plates are imported as parts for transformers to avoid the tax.

"Among the major US import sources of electrical transformers, Korea is the only country whose exports to the United States have recently been decreasing dramatically. In light of this trend, we believe that Korean electrical transformers being imported into the US market do not threaten to impair the US national security,” KITA said in the opinion.

Korea’s exports to the US declined to $154 million last year from $294 million in 2016 due to high anti-dumping duties on transformers.

Korean companies have been expanding their investments in the US.

Hyundai Electric set up a $200 million transformer production plant in Alabama in 2011 to expand production in the US while Hyosung acquired a transformer plant of Mitsubishi, Japan, in Tennessee, for $47 million in December.

“It is important to procure transformers and parts from reliable suppliers to stabilize the grid which is a key infrastructure related to national security,” according to the opinion.

Most of the Korean transformers used Korean-made parts that passed the US high-quality standards and have stably supplied them to customers over the past 40 years to build trust, it added.

By Shin Ji-hye (shinjh@heraldcorp.com)



Caption: Hyosung Power & Industrial Systems’ super-high pressure transformer (Hyosung)