US President Donald Trump said on Friday he planned to increase tariffs on imported steel and aluminium to 50% from 25% starting Wednesday, ratcheting up pressure on global steel producers and deepening his trade war.
South Korea is the fourth-biggest exporter of steel to the US, behind Canada, Mexico and Brazil last year, according to American Iron and Steel Institute data.
South Korea’s industry ministry said in a statement that it had held an emergency meeting with officials from the country’s major steelmakers, including POSCO and Hyundai Steel.
Shares of South Korean steelmakers lost ground today, with POSCO and Hyundai Steel falling 3% and SeAH Steel Corp down 6.3% in morning trade.
The 50% tariffs will add challenge to Korean steel exporters which have refrained from sharply boosting exports to the US to avoid Washington scrutiny, despite rising US steel prices, an industry executive told Reuters.
“It will be a burden to exporting companies, if there are no additional steel price increases in the US,” he told Reuters, asking not to be identified due to the sensitivity of the issue.
Despite tariffs, South Korea’s steel shipments to the US rose 12% in April from a year earlier, according to trade data.
Steel and aluminium tariffs were among the earliest put into effect by Trump when he returned to office in January.
The tariffs of 25% on most steel and aluminium imported to the US went into effect on March 12.
Industry officials said the tariffs have increased steel prices in the US, impacting several sectors, including home appliances, cars, and construction.
Trade talks
South Korea, a major US ally, has called for the exemption of tariffs on steel, autos and others items, during talks with the US.
Seoul agreed in late April to craft a trade package by the end of the 90-day pause on Trump’s reciprocal tariffs in July, but it has been difficult for negotiators to make big decisions due to a political leadership vacuum.
In late March, Hyundai Steel announced a plan to build a US$5.8 billion factory in Louisiana in response to US tariffs, but the factory will not open until 2029.
In April, Hyundai Steel’s bigger rival POSCO signed a preliminary deal to make an equity investment in the factory project.