Synopsis
On February 11, South Korea's industry ministry announced strategic discussions with local businesses to address the implications of new US tariffs on steel and aluminum imports, aiming to shield local manufacturers from potential adverse effects.Key Takeaways
- South Korea's industry ministry is in talks with local firms regarding US tariffs.
- The US has implemented a 25% tariff on steel and aluminum imports.
- South Korea was the fourth-largest steel exporter to the US last year.
- Emergency meetings aim to protect local industries.
- Concerns and opportunities coexist due to shifting US trade policies.
Seoul, Feb 11 (NationPress) The industry ministry of South Korea announced on Tuesday that it is actively coordinating with domestic businesses and industry leaders to formulate strategies aimed at reducing the repercussions from the new U.S. tariffs on steel and aluminium imports, which are expected to impact local manufacturers and exporters significantly.
The Ministry of Trade, Industry and Energy convened an urgent meeting with representatives from the Korean steel sector to evaluate the potential effects of the U.S. tariffs on local enterprises, as reported by ministry officials.
Earlier that day, U.S. President Donald Trump formalized his decision to implement 25 percent tariffs on all steel and aluminium products entering the United States, effective from March 12, according to Yonhap news agency.
This announcement raised alarm bells as South Korean firms could be directly impacted by the impending U.S. tariffs, a contrast to previous tariff actions on Canadian, Mexican, and Chinese imports.
Last year, South Korea ranked as the fourth-largest steel exporter to the United States, supplying approximately 11 percent of the country’s steel imports, based on data from the U.S. International Trade Administration.
The nation was similarly the fourth-largest aluminium exporter to the U.S., accounting for around 4 percent of its aluminium imports.
Trump had previously enacted a 25 percent tariff on all steel imports to the U.S. in 2018, citing national security concerns.
At that time, the U.S. exempted South Korean steel products from these tariffs in exchange for a yearly import quota of 2.63 million tons, representing about 70 percent of Seoul's average export volume from 2015 to 2017.
During the emergency meeting, the industry ministry highlighted its intention to maintain close communication with the U.S. government to safeguard the interests of the South Korean steel and aluminium sectors while developing measures to mitigate the impact of the U.S. tariffs.
Trade Minister Cheong In-kyo stated, "Steel exports to the U.S. may decline if the price of steel products manufactured in America becomes comparatively lower than foreign products after the new tariffs are implemented."
"However, there could also be new opportunities as the competitive landscape will shift to be more equitable for all major steel exporters," he added.
Senior officials from the ministry are planning a visit to the U.S. shortly to convey the concerns of Korean industries to relevant authorities.
Austin Chang, president of the institute for international trade under the Korea International Trade Association (KITA), indicated that both concerns and opportunities arise with the changes in U.S. trade policies.
"Korean steelmakers may experience adverse effects on profitability since they might not sustain their sales at original prices if U.S. tariffs come into play," Chang noted.
"Nonetheless, these companies might find a chance to gain a competitive advantage over Canada and Mexico, which are two significant steel exporters to the U.S., due to the lifting of the quota," he added.
Unlike South Korea, Canada and Mexico received exemptions from the import quota and tariffs on their steel and aluminium shipments to the U.S.
