[Korea View] Trump’s 25% Tariff: Prospects for Korean Steel

Trump’s 25% Tariff: Prospects for Korean Steel
An Industry on the Brink and Government Response

 

News recently broke that U.S. President Donald Trump is set to impose a blanket 25% tariff on Korean steel exports, causing significant disruption across Korea’s steel industry and related sectors. Korea had previously negotiated a quota of 2.63 million tons in annual steel exports to the United States, exempting that portion from tariffs. However, starting on March 12—just one month away—this exemption is slated to disappear, applying a uniform 25% tariff to all steel shipments. Given that U.S. markets play a major role for Korean steelmakers, there is concern this could trigger a “second wave of trade friction.” Further raising alarm, Trump has also hinted at additional tariffs on other key Korean export items such as semiconductors and automobiles, prompting both government and industry officials to voice their worries.

https://www.g-enews.com/article/Industry/2024/03/202403111306011728e8b8a793f7_1

 

 

One notable development emerged from a recent high-level economic meeting in Seoul, where officials announced their intention to send a senior delegation to the United States for direct talks with the Trump administration. According to reports (CSV data summary), the acting Deputy Prime Minister and other ministerial-level figures plan to visit Washington, aiming to engage with key U.S. policymakers face to face.

 

• Subject to 25% Tariffs as of March 12: Steel and aluminum (including processed steel products)
• Abolition of the Current Duty-Free Quota: 2.63 million tons annually
• Major Steel Suppliers to the U.S. (annual export volume)
  • 1st: Canada (approx. $11.2 billion)
  • 2nd: Mexico
  • 4th: Korea (approx. $3.2 billion)

The impact of this move is not limited to steel tariffs alone. The Trump administration cites Section 232 of the Trade Expansion Act as justification for potentially imposing broader tariffs on various products. Indeed, media coverage consistently references “automobiles, semiconductors, and pharmaceuticals” as likely next targets. While some experts note these measures are politically motivated to boost U.S. domestic production and jobs, they caution that nations like Korea, seeking to compete on equal footing, need more than basic lobbying—they need a comprehensive strategy. From the industry’s perspective, applying a flat 25% tariff will drastically erode price competitiveness in the U.S., compelling Korean companies to diversify export markets and develop higher-value-added products. The government is also exploring collective strategies with nations in similar positions, like Japan and the European Union, but it remains to be seen whether it can secure any preferential concessions in upcoming talks.

 

 

History in HD of Unsplash

 

 

Despite the widespread concern, some observers believe the U.S. might still leave room for negotiations over a possible “tariff relief.” In 2018, a similar scenario played out when Trump initially announced tariffs on all global steel imports, but later granted partial exemptions or quota-based allowances to certain countries, including Korea. Yet the government’s view of potential “opportunities” also clashes with industry fears that an extended tariff regime could cripple export competitiveness. To minimize risks, many argue that a multifaceted diplomatic approach is vital, along with a fundamental shift toward enhancing domestic steel quality and innovation.

[Glossary Box] What is Section 232 of the Trade Expansion Act?
Under U.S. law, the president can impose tariffs on specific imports (e.g., steel, aluminum) on grounds of national security, as per Section 232. President Trump invoked it in 2018, applying a 25% tariff on steel products.

Currently, neither the industry nor the government can precisely predict the outcome of future negotiations. Many analysts suggest that, if handled strategically, this crisis could serve as a catalyst for restructuring Korea’s export model and intensifying its focus on high-value steel products. Meanwhile, major export sectors like semiconductors and automobiles are not necessarily safe, either. This means that active diplomacy and industry-led innovation must go hand in hand if Korea is to discover a viable long-term solution.

This article was written with the help of AI.

 

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