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Trump threat of 25 percent tariff sends Hyundai Steel, Posco Holdings tumbling

Published: 10 Feb. 2025, 17:55 Updated: 10 Feb. 2025, 19:37

SHIN HA-NEE
[email protected]

President Donald Trump speaks to reporters aboard Air Force One on Feb. 9. [AP/YONHAP]

U.S. President Donald Trump’s announcement of 25 percent tariffs on steel and aluminum imports sent Korean steel stocks tumbling on Monday.

Hyundai Steel dipped 2.03 percent to close at 21,700 won ($15) on the Kospi bourse that day, after falling as low as 3.16 percent mid-trading.

Posco Holdings briefly plunged to a 52-week low of 227,500 won during trading, down 4.18 percent from the previous session, before rebounding to close at 237,000 won, a 0.84 percent decline.

Daehan Steel fell 5.51 percent mid-trading before closing at 15,000 won, down 3.91 percent.

SeAH Besteel Holdings dropped 3.66 percent to 18,180 won, and Dongkuk Steel Mill slid 3.66 percent to 7,910 won.

The KRX Steels index, consisting of 20 stocks in the steel and minerals industry including Posco Holdings, Hyundai Steel and Korea Zinc, fell 0.95 percent on Monday. The index has declined 4.63 percent through February, recording a particularly steep drop of 4.14 percent on Feb. 3, after Trump indicated that he would levy additional taxes on steel, aluminum and copper.

The latest market jitters were spurred by Trump’s remarks during a meeting with reporters on Sunday, in which he said that new 25 percent tariffs on all steel and aluminum imports would be announced on Monday.

The United States was Korea’s third-largest steel importer by volume last year, accounting for 10 percent of the nation's total outbound shipments, following Japan and India. Korea is also its North American ally's No. 4 steel importer, following Canada, Brazil and Mexico.

During his first term in the White House in 2018, Trump initially proposed a 53 percent tariff on steel imports from Korea, which was later replaced with a duty-free import quota of 2.63 million tons, amounting to about 70 percent of Korea’s average steel exports to the United States from 2015 to 2017.

Korea’s Ministry of Trade, Industry and Energy convened an emergency meeting with steelmakers on Monday, chaired by Deputy Minister for Trade Park Jong-won.

The government has utilized “all connections available” in the United States to gather more information about the tariff announcement, according to the ministry.

“The government will closely work with the industry to minimize any possible impact on our companies’ operations,” said Park.

Korean steelmakers are mulling to make a foray onto U.S. soil, seeking a breakthrough amid growing tariff woes and escalating competition from cheaper Chinese products.

“Domestic steelmakers are largely in wait-and-see mode, but may consider direct investment based on the extent of the tariff implementation,” noted Choi Yong-hyun, analyst at KB Securities.

“Korean steelmakers cannot overlook the U.S. market as their key clients in the manufacturing sector have been ramping up investments in the country.”

Hyundai Steel, which supplies auto parts to Hyundai Motor, is reportedly considering a multibillion-dollar investment in the United States to build a production facility.

Posco Holdings is also considering building production facilities in the United States and India. The holding company of steelmaker Posco initially made the announcement in July of last year and said on Feb. 3 that the company was “carefully considering its options.”

BY SHIN HA-NEE [[email protected]]