Seoul: The steel industry and related sectors in South Korea are preparing for potential repercussions after U.S. President Donald Trump signed proclamations imposing 25 percent tariffs on all steel and aluminum imports. The move has created uncertainty as details regarding the scope and implementation of the tariffs remain unclear. Experts anticipate significant disruptions in the South Korean steel market and the global market.
According to Yonhap News Agency, during Trump's first term, he imposed similar tariffs on steel and aluminum imports, citing national security. South Korea previously negotiated a tariff exemption for a yearly quota of 2.63 million tons of steel shipments to the U.S., which accounted for about 70 percent of a three-year average. On Monday, the Ministry of Trade, Industry and Energy convened with officials from major local steel companies, including POSCO Holdings Inc. and Hyundai Steel Co., to discuss possible responses to the proposed U.S. tariffs.
Industry watchers express concern that a continuation of the quota system, in conjunction with the new 25 percent tariff, could render South Korean exports to the U.S. far less competitive. An industry official, who requested anonymity, stated, "We are closely monitoring the U.S. government's official stance and will seek ways to secure additional export volume beyond the quota limit."
The anticipated U.S. duties are expected to exacerbate existing challenges for the South Korean steel industry, which is already facing oversupply issues, particularly from China, and declining global demand. If cheaper Chinese steel products are unable to enter the U.S. market, they may flood other regions, such as Europe and Southeast Asia, increasing price competition for South Korean steelmakers.
The local automotive industry, a major consumer of steel and aluminum, is also likely to be affected. Hyundai Motor Group, which imports South Korean steel and aluminum for its North American production facilities, is facing potential cost increases as it plans to expand local production in the U.S. to 1.18 million vehicles annually. "Manufacturing cars in the U.S. using imported Korean steel will inevitably lead to higher costs," said Lee Ho-geun, an automotive engineering professor at Daedeok University.
Home appliance manufacturers are also assessing their options. Samsung Electronics Co. and LG Electronics Inc., which operate manufacturing plants in South Carolina and Tennessee, respectively, are reconsidering plans to expand their U.S. production lines due to the new U.S. tariffs on Mexican imports. The steel tariff situation has further complicated their calculations, prompting the sector to explore sourcing U.S.-produced steel as a mitigation strategy.
While there have been no specific Trump tariff measures announced targeting the semiconductor industry, chipmakers are vigilantly observing related developments. "Without concrete details on the criteria or tariff rates, it's difficult to assess the direct impact," a chip industry official commented. Domestic semiconductor companies with high export dependency on the U.S. may struggle to avoid adverse effects if tariffs are imposed. "If tariffs rise immediately, demand for semiconductors in the U.S. could decline," noted Kim Hyung-jun, head of the Next-Generation Intelligence Semiconductor Foundation.