SEOUL: South Korea’s Ministry of Trade, Industry and Energy has announced its intention to actively engage with US counterparts to address the planned increase in steel tariffs, seeking to cushion the domestic industry from a potential 50% levy on exports to the United States.
This response follows US President Donald Trump’s declaration on Friday to double tariffs on imported steel and aluminium—from 25% to 50%—effective Wednesday. The move intensifies global trade tensions and places additional strain on major steel-exporting nations.
South Korea, ranked the fourth-largest steel exporter to the US in 2024 after Canada, Mexico, and Brazil, is particularly exposed to these tariff hikes. In an official statement, the ministry confirmed it convened an emergency session with executives from leading domestic steel manufacturers, including POSCO and Hyundai Steel, to formulate a coordinated response.
Investor sentiment was immediately affected. On Monday, POSCO and Hyundai Steel shares each declined by 3%, while SeAH Steel Corp saw a sharper fall of 6.3% in early trading.
An industry executive, speaking anonymously, noted that exporters have intentionally limited steel shipments to the US to avoid regulatory scrutiny despite favourable price dynamics. “If US steel prices do not rise further, these tariffs will become a substantial burden on Korean exporters,” the executive remarked.
Despite the risks, South Korea’s steel exports to the US rose 12% year-on-year in April, reflecting continued demand amid elevated prices. Steel and aluminium tariffs were among the first trade measures reinstated by President Trump upon returning to office, with the initial 25% duties reimposed on 12 March.
The US tariffs have driven up domestic steel prices, with downstream effects across sectors such as automotive manufacturing, home appliances, and construction.
Trade Talk
As a key strategic ally, South Korea has requested tariff exemptions on steel, automotive products, and other key exports during ongoing negotiations with Washington. In April, Seoul agreed to present a trade package before the conclusion of a 90-day tariff suspension in July. However, progress has been impeded by a lack of political leadership in Seoul.
Amid these discussions, Hyundai Steel in late March announced plans to build a US$5.8 billion manufacturing facility in Louisiana, a move widely interpreted as an effort to mitigate tariff exposure. The plant is scheduled for completion in 2029. In April, rival firm POSCO entered into a preliminary agreement to take an equity stake in the same project.
The South Korean government reiterated its commitment to protect national industrial interests and minimise trade disruption, stating that it will maintain close consultation with both domestic industry stakeholders and US officials in the coming weeks.
-Reuters
