South Korea to Reduce Impact of 50% Steel Tariff, Ministry Announces

Highlights 

• South Korea's Industry Ministry convened an emergency meeting with major steelmakers, including POSCO and Hyundai Steel, to address the impending 50% U.S. tariff on steel imports. 
• In response to the tariff hike, Hyundai Steel announced plans to invest $5.8 billion in constructing a steel plant in Louisiana by 2029, with POSCO considering participation, as part of efforts to maintain competitiveness in the U.S. market.

South Korea's Industry Ministry said on Monday that it will respond to the looming 50% US tariff on steel products as part of its trade talks with Washington in order to minimise the impact on the industry. 

US President Donald Trump announced on Friday that he intends to raise tariffs on imported steel and aluminum to 50% from 25% beginning Wednesday, increasing pressure on global steel producers and deepening his trade war. 

According to data from the American Iron and Steel Institute, South Korea was the fourth-largest steel exporter to the United States last year, trailing Canada, Mexico, and Brazil. 

The South Korean Industry Ministry announced in a statement that it had held an emergency meeting with officials from the country's major steelmakers, including POSCO and Hyundai Steel.

South Korean steelmakers' shares fell on Monday, with POSCO and Hyundai Steel down 3% and SeAH Steel Corp down 6.3% in morning trade.

The 50% tariffs will present a new challenge for Korean steel exporters, who have refrained from significantly increasing exports to the United States in order to avoid Washington scrutiny, despite rising steel prices, according to an industry executive. 

"It will be a burden for exporting companies if there are no additional steel price increases in the United States," he told Reuters, declining to be identified due to the sensitivity of the situation. 

Despite tariffs, South Korea's steel shipments to the United States increased 12 percent in April compared to the previous year, according to trade data. 

Steel and aluminum tariffs were among the first put in place by Trump when he returned to office in January. The 25% tariffs on most steel and aluminum imported into the United States went into effect on March 12. 

According to industry officials, tariffs have raised steel prices in the United States, affecting a variety of industries such as home appliances, automobiles, and construction.