Ministry explores ways to blunt impact of Mexican steel tariffs

Foreign Minister Park Jin, left, at a Posco factory in Mexico on May 10. [YONHAP]

Korea is seeking ways to minimize potential damage to its domestic steel industry from Mexico's recent hike in steel import tariffs, expectations of a limited impact notwithstanding, the Ministry of Trade, Industry and Energy said Tuesday.

Last week, Mexico increased tariffs on imports of steel products from around 10 percent to up to 25 percent, citing the need to prop up its own steel industry and market. The move will remain effective until July 2025.

The South Korean industry ministry met with officials from major steelmakers, including Posco Holdings Inc. and Hyundai Steel Co., in Seoul on Tuesday to share their assessment of the decision and discuss responses.

The companies said the latest increase is expected to have a limited impact, as some 85 percent of steel products shipped to Mexico are exempted from tariffs under Mexico's industry promotion policy measures.

However, they are expected to be affected to some extent, and preparations for longer-term impacts are needed given uncertainties regarding the current tariff exemption, the ministry said.

Of Korea's total steel exports, some 7.8 percent are shipped to Mexico in terms of volume, or 8.3 percent in value, according to data from the Korean Iron and Steel Association.

"Global circumstances in the steel industry and the overall trade have been changing fast. We will boost government-to-government consultations with Mexico to minimize the impact on our firms," a ministry official said.

Yonhap