The World Trade Organization backed a complaint by the South Korean government that U.S. tariffs on Hynix Semiconductor Inc.'s computer chips violate global trade rules, a U.S. trade official said.
The U.S. failed to prove that Hynix, the world's third-biggest memory chip maker, got an unfair state subsidy when South Korean banks gave the company loan guarantees and rollovers in 2002, Geneva-based arbiters said in a confidential ruling. The U.S. alleged that the government directed banks to provide the aid.
The U.S. will appeal, and the decision won't necessarily end the duties, said the trade official, who asked not to be identified. South Korea filed a separate WTO complaint against European Union tariffs on Hynix chips.
The U.S. and the EU accused South Korea of illegally bailing out Hynix through government-backed financial restructuring packages. The U.S. slapped 45% duties on Hynix's memory chips and the EU imposed a 35% tax.