(Source: Supply Chain 360)
By Aubrey Kim, New York Correspondent
U.S. President Donald Trump’s sudden announcement to double tariffs on imported steel from 25% to 50% has sent shockwaves through South Korea’s steel industry and its export-driven economy. The measure, unveiled by Trump himself on May 30 during a visit to the US Steel plant in Pittsburgh, Pennsylvania, will take effect from June 4. South Korea’s steel sector, already reeling from the previous 25% tariffs, saw a sharp plunge in stock prices following the news, and concerns are mounting over weakening export competitiveness and a broader industrial crisis.
“Protecting U.S. Steel” Justification—Korean Steel Industry in Panic
President Trump asserted that the 25% tariff still left “loopholes” for foreign steel to enter the U.S. market and stated, “Raising it to 50% means no one will get past this barrier.” The U.S. government is leveraging Section 232 of the Trade Expansion Act, citing national security, to justify the tariffs. The move is aimed at protecting the domestic steel industry and creating jobs.
Major steel-exporting countries including South Korea, Vietnam, Japan, and the EU will all be affected. South Korea, the fourth-largest exporter of steel to the U.S. as of 2024, sends approximately 13% of its total steel exports to the American market. In 2024, Korea’s steel exports to the U.S. were valued at about $1.76 billion (approximately 2.4 trillion KRW), totaling 2.55 million tons.
Steel Stocks Plummet, Exports Drop—The ‘Tariff Shock’ Becomes Reality
Immediately after the tariff announcement, South Korean steel stocks plummeted. Shares of key companies such as Seah Steel (-10.12%), Husteel (-5.94%), and KG Steel (-6.16%) dropped sharply. Hyundai Steel and POSCO Holdings also saw significant declines. An industry insider commented, “Profitability was already seriously hit with the 25% tariffs. At 50%, U.S. exports may become completely unfeasible.”
Indeed, in Q1 2025, Korea’s steel exports to the U.S. dropped to 672,923 tons, a 15.4% year-on-year decrease. In March alone, exports fell 13.7% to 240,000 tons. While high U.S. steel prices had previously helped maintain exports despite the 25% tariff, analysts now say the 50% rate will effectively erase price competitiveness.
A representative from the Korea Iron & Steel Association noted, “U.S. steel prices were 20–30% higher than other countries, allowing exports to continue despite tariffs. But with a 50% tariff, the drop in export volume will likely be much steeper.”
Government and Industry Respond Swiftly—“Minimizing Damage a Top Priority”
The South Korean government immediately took action. On June 2, the Ministry of Trade, Industry and Energy held an emergency meeting with major steelmakers such as POSCO and Hyundai Steel, discussing multilateral countermeasures including negotiations with the U.S., industry support, and information sharing. The government stated, “We will do everything possible in trade talks with the U.S. to minimize damage to Korea’s steel industry.”
The steel sector is planning to respond by expanding local production in the U.S., diversifying export markets, and developing high-value-added products. POSCO and Hyundai Steel are planning to invest $5.8 billion by 2029 to build an integrated electric arc furnace steel mill in Louisiana. However, with operations expected to take at least 4–5 years to begin, short-term shocks will be difficult to avoid.
“Heavy Blow to Export-Dependent Structure”—Ripple Effects Across Industries
The tariff hike is expected to send ripple effects beyond steel to related manufacturing industries such as automotive and shipbuilding. Steel is a key material for Korea’s core industries like automobiles, shipbuilding, and construction. Declines in exports and profitability may shrink the entire industrial ecosystem. Small and mid-sized steel firms without local U.S. operations are expected to be hit particularly hard.
Adding to concerns, the U.S. has hinted at expanding tariffs to other sectors like automobiles and semiconductors, increasing overall uncertainty for Korean exports. With global supply chains being restructured and protectionism rising, Korea’s export-reliant economic model is facing structural limitations.
“Pressure to Invest Locally, Realignment of Global Supply Chains”—Long-Term Strategy Needed
President Trump welcomed major foreign investments like Nippon Steel’s $14 billion acquisition of U.S. Steel, clearly conveying the message: “Produce in America.” This reflects a strategy to attract foreign companies to build plants in the U.S., create jobs, and restructure global supply chains around America.
Experts argue, “The tariff hike is not just a short-term squeeze, but part of a long-term strategy to reconfigure global supply chains centered on the U.S.” They stress that Korean firms must respond structurally through local U.S. production expansion, market diversification, and development of high-value products.
“Damage Unavoidable—Joint Response by Government and Industry Crucial”
Industry representatives are urging the government to take strong action, including high-level talks with the U.S., trade remedies, and support for SMEs. One steel company official said, “If tariffs become a reality, not only will U.S.-bound exports decline, but our overall position in global markets could weaken. The government and industry must work together to minimize the damage.”
Although the government has pledged a comprehensive response involving negotiations, support, and coordination, finding a solution in the short term remains a major challenge.
Trump’s Tariffs as a Wake-Up Call—A Turning Point for Korean Industry
Trump’s tariff hike is more than just a blow to exports—it signals the need for structural change in Korea’s steel industry and export economy. With high dependence on the U.S. market, Korea’s steelmakers face a survival crisis unless they fundamentally restructure through local production, market diversification, and value-upgrading.
Amid rising global protectionism, close cooperation between the government and industry and the establishment of long-term strategies are more urgent than ever. This tariff hike may serve as both a warning light and a potential turning point for the Korean industrial sector.
Copyright © The Value Chain Times. All rights reserved. Unauthorized reproduction, redistribution, and use for AI training are strictly prohibited.
[The Value Chain Times = Aubrey Kim, New York Correspondent]
(Source: Supply Chain 360)
By Aubrey Kim, New York Correspondent
U.S. President Donald Trump’s sudden announcement to double tariffs on imported steel from 25% to 50% has sent shockwaves through South Korea’s steel industry and its export-driven economy. The measure, unveiled by Trump himself on May 30 during a visit to the US Steel plant in Pittsburgh, Pennsylvania, will take effect from June 4. South Korea’s steel sector, already reeling from the previous 25% tariffs, saw a sharp plunge in stock prices following the news, and concerns are mounting over weakening export competitiveness and a broader industrial crisis.
“Protecting U.S. Steel” Justification—Korean Steel Industry in Panic
President Trump asserted that the 25% tariff still left “loopholes” for foreign steel to enter the U.S. market and stated, “Raising it to 50% means no one will get past this barrier.” The U.S. government is leveraging Section 232 of the Trade Expansion Act, citing national security, to justify the tariffs. The move is aimed at protecting the domestic steel industry and creating jobs.
Major steel-exporting countries including South Korea, Vietnam, Japan, and the EU will all be affected. South Korea, the fourth-largest exporter of steel to the U.S. as of 2024, sends approximately 13% of its total steel exports to the American market. In 2024, Korea’s steel exports to the U.S. were valued at about $1.76 billion (approximately 2.4 trillion KRW), totaling 2.55 million tons.
Steel Stocks Plummet, Exports Drop—The ‘Tariff Shock’ Becomes Reality
Immediately after the tariff announcement, South Korean steel stocks plummeted. Shares of key companies such as Seah Steel (-10.12%), Husteel (-5.94%), and KG Steel (-6.16%) dropped sharply. Hyundai Steel and POSCO Holdings also saw significant declines. An industry insider commented, “Profitability was already seriously hit with the 25% tariffs. At 50%, U.S. exports may become completely unfeasible.”
Indeed, in Q1 2025, Korea’s steel exports to the U.S. dropped to 672,923 tons, a 15.4% year-on-year decrease. In March alone, exports fell 13.7% to 240,000 tons. While high U.S. steel prices had previously helped maintain exports despite the 25% tariff, analysts now say the 50% rate will effectively erase price competitiveness.
A representative from the Korea Iron & Steel Association noted, “U.S. steel prices were 20–30% higher than other countries, allowing exports to continue despite tariffs. But with a 50% tariff, the drop in export volume will likely be much steeper.”
Government and Industry Respond Swiftly—“Minimizing Damage a Top Priority”
The South Korean government immediately took action. On June 2, the Ministry of Trade, Industry and Energy held an emergency meeting with major steelmakers such as POSCO and Hyundai Steel, discussing multilateral countermeasures including negotiations with the U.S., industry support, and information sharing. The government stated, “We will do everything possible in trade talks with the U.S. to minimize damage to Korea’s steel industry.”
The steel sector is planning to respond by expanding local production in the U.S., diversifying export markets, and developing high-value-added products. POSCO and Hyundai Steel are planning to invest $5.8 billion by 2029 to build an integrated electric arc furnace steel mill in Louisiana. However, with operations expected to take at least 4–5 years to begin, short-term shocks will be difficult to avoid.
“Heavy Blow to Export-Dependent Structure”—Ripple Effects Across Industries
The tariff hike is expected to send ripple effects beyond steel to related manufacturing industries such as automotive and shipbuilding. Steel is a key material for Korea’s core industries like automobiles, shipbuilding, and construction. Declines in exports and profitability may shrink the entire industrial ecosystem. Small and mid-sized steel firms without local U.S. operations are expected to be hit particularly hard.
Adding to concerns, the U.S. has hinted at expanding tariffs to other sectors like automobiles and semiconductors, increasing overall uncertainty for Korean exports. With global supply chains being restructured and protectionism rising, Korea’s export-reliant economic model is facing structural limitations.
“Pressure to Invest Locally, Realignment of Global Supply Chains”—Long-Term Strategy Needed
President Trump welcomed major foreign investments like Nippon Steel’s $14 billion acquisition of U.S. Steel, clearly conveying the message: “Produce in America.” This reflects a strategy to attract foreign companies to build plants in the U.S., create jobs, and restructure global supply chains around America.
Experts argue, “The tariff hike is not just a short-term squeeze, but part of a long-term strategy to reconfigure global supply chains centered on the U.S.” They stress that Korean firms must respond structurally through local U.S. production expansion, market diversification, and development of high-value products.
“Damage Unavoidable—Joint Response by Government and Industry Crucial”
Industry representatives are urging the government to take strong action, including high-level talks with the U.S., trade remedies, and support for SMEs. One steel company official said, “If tariffs become a reality, not only will U.S.-bound exports decline, but our overall position in global markets could weaken. The government and industry must work together to minimize the damage.”
Although the government has pledged a comprehensive response involving negotiations, support, and coordination, finding a solution in the short term remains a major challenge.
Trump’s Tariffs as a Wake-Up Call—A Turning Point for Korean Industry
Trump’s tariff hike is more than just a blow to exports—it signals the need for structural change in Korea’s steel industry and export economy. With high dependence on the U.S. market, Korea’s steelmakers face a survival crisis unless they fundamentally restructure through local production, market diversification, and value-upgrading.
Amid rising global protectionism, close cooperation between the government and industry and the establishment of long-term strategies are more urgent than ever. This tariff hike may serve as both a warning light and a potential turning point for the Korean industrial sector.
Copyright © The Value Chain Times. All rights reserved. Unauthorized reproduction, redistribution, and use for AI training are strictly prohibited.
[The Value Chain Times = Aubrey Kim, New York Correspondent]