Seoul: South Korea’s industry ministry announced its active engagement with local businesses and industry leaders to develop strategies to mitigate the adverse effects of newly imposed U.S. tariffs on steel and aluminum imports. The Ministry of Trade, Industry and Energy convened an emergency meeting with officials from the Korean steel industry to evaluate the potential consequences of the U.S. tariffs on domestic businesses.
According to Yonhap News Agency, U.S. President Donald Trump signed proclamations earlier in the day to implement 25 percent tariffs on all steel and aluminum products entering the United States starting March 12. This development has raised concerns that South Korean companies could face direct repercussions from these tariffs, unlike previous U.S. tariff impositions that targeted goods from Canada, Mexico, and China.
South Korea ranks as the fourth-largest exporter of steel to the United States, contributing approximately 11 percent to Washington’s steel imports, based on data from the U.S. International Trade Administration. Additionally, South Korea was the fourth-largest exporter of aluminum to the U.S., accounting for about 4 percent of its aluminum imports. In 2018, Trump imposed a 25 percent tariff on all steel imports to the U.S., citing national security concerns. At that time, South Korea received a tariff waiver in exchange for a yearly import quota of 2.63 million tons, representing about 70 percent of Seoul’s average export volume between 2015 and 2017.
During the emergency meeting, the industry ministry emphasized its commitment to closely engage with the U.S. government to safeguard the interests of South Korean steel and aluminum industries and to devise measures to cushion the impact of the U.S. tariffs. Trade Minister Cheong In-kyo noted that steel exports to the U.S. might decline if domestic American steel products become relatively cheaper due to the new tariffs. However, Cheong also highlighted potential opportunities as all major steel exporters would compete on an even playing field.
The ministry disclosed plans for senior officials to visit the U.S. soon to convey the concerns of Korean industries to relevant authorities. Austin Chang, president of the institute for international trade under the Korea International Trade Association (KITA), echoed concerns and potential opportunities arising from the shift in U.S. trade policies. Chang indicated that while Korean steelmakers might face profitability challenges, they could also gain a competitive advantage over Canada and Mexico, which have exemptions from the import quota and tariffs on their U.S. steel and aluminum shipments.
In response to the new tariffs, Korean steelmakers are closely monitoring the situation and assessing details before formulating countermeasures. POSCO Holdings Inc. and Hyundai Steel Co., South Korea’s two largest steelmakers, are contemplating establishing production facilities in the U.S. to navigate trade barriers posed by the latest tariffs.
Market analysts also express apprehension that the proposed U.S. tariffs could impact the automotive and home appliances industries, significant consumers of steel and aluminum. Hyundai Motor Group, for instance, imports South Korean steel and aluminum for its North American production facilities, including the newly built Hyundai Motor Group Metaplant America in Georgia. Other major Korean industries, such as the semiconductor sector, remain vigilant as Trump has indicated potential tariffs on cars, semiconductors, and pharmaceuticals, among other items.