Seoul: South Korea's industry ministry announced on Tuesday its active engagement with local businesses and industry leaders to develop strategies aimed at mitigating the repercussions of newly imposed U.S. tariffs on steel and aluminum imports. The ministry emphasized the necessity of these communications in light of the potential impact on South Korean manufacturers and exporters.
According to Yonhap News Agency, the Ministry of Trade, Industry and Energy convened an emergency meeting with representatives from the Korean steel industry to evaluate the potential effects of the U.S. tariffs on domestic enterprises. This development followed U.S. President Donald Trump's proclamations earlier in the day, which imposed 25 percent tariffs on all steel and aluminum products entering the United States, set to commence on March 12.
The announcement triggered apprehensions that South Korean firms might be significantly affected by the U.S. tariffs, in contrast to previous tariffs imposed by the Trump administration on Canadian, Mexican, and Chinese imports. South Korea ranked as the fourth-largest exporter of steel to the United States last year, contributing to approximately 11 percent of the U.S.'s steel imports, according to data from the U.S. International Trade Administration. The country also stood as the fourth-largest exporter of aluminum, accounting for about 4 percent of U.S. aluminum imports.
In 2018, Trump had already imposed a 25 percent tariff on all steel imports to the U.S., citing national security reasons. At that time, tariffs on South Korean steel products were waived in exchange for an annual import quota of 2.63 million tons, which represented around 70 percent of South Korea's average export volume between 2015 and 2017.
During the emergency meeting, the industry ministry stressed its commitment to maintaining close communication with the U.S. government to safeguard the interests of South Korea's steel and aluminum sectors and to formulate measures to reduce the U.S. tariffs' impact. Trade Minister Cheong In-kyo remarked on the potential decline in steel exports to the U.S. if American-produced steel becomes more cost-competitive post-tariffs. However, he also noted potential new opportunities arising from a level playing field among major steel exporters.
The ministry plans to dispatch senior officials to the U.S. soon to convey the concerns of the Korean industries to relevant authorities. Market analysts express concern that the proposed tariffs could also influence sectors like automotive and home appliances, which heavily rely on steel and aluminum. Hyundai Motor Group, for example, imports South Korean steel and aluminum for its North American facilities, including the Hyundai Motor Group Metaplant America in Georgia. Additionally, other key Korean industries, such as semiconductors, remain vigilant as Trump hinted at possible tariffs on cars, semiconductors, and pharmaceuticals.