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Steelmakers to set up 'item-by-item' export strategy on Trump's tariffs

Published: 03 Apr. 2025, 18:35

This file photo, taken March 12, shows aluminum products at a plant in Hwaseong, Gyeonggi. [YONHAP]

Korean steelmakers said Thursday they will set up an "item-by-item" export strategy through close consultations with government officials and industry associations in response to hefty U.S. tariffs.

U.S. President Donald Trump imposed 25 percent tariffs on steel and aluminum imports in mid-March and slapped country-specific reciprocal duties on around 60 countries, including 26 percent duties for Korea.

Korean steelmakers, already suffering an oversupply and slowing prices, had been deeply concerned that the addition of reciprocal tariffs may significantly undermine their price competitiveness in the U.S. market.

Giving them a breather, the White House said on Wednesday (local time) that steel and aluminum imports would not be subject to the reciprocal tariffs.

On Thursday, Posco Holdings fell 0.37 percent to 271,000 won ($185.12) on the news, but Hyundai Steel rose 0.83 percent to 24,300 won, both outperforming the broader Kospi's 0.76 percent decline.

"We [steelmakers] will closely cooperate with the government and the Korea Iron & Steel Association [KISA] to swiftly respond to U.S. tariffs. While monitoring the market, we will revise our export strategies, focusing on each product type," a Hyundai Steel official said.

His position was echoed by Posco, the country's leading steelmaker.

Steel export data for March are being collected for release later in the month. Once the monthly data is announced, local steel firms will be able to devise their export strategies, a KISA official said.

"Accumulated export data for the three months through June will clearly show how much Trump's tariffs affected local steelmakers' earnings," the official said.

On top of revising its export strategies, Hyundai Steel has decided to build an integrated steel mill in the United States, while Posco is reviewing investment plans for U.S. production facilities.

"We are now seriously considering investment plans for upstream steel processes," a Posco official said.

Hyundai Steel plans to invest $5.8 billion to build an electric arc furnace-based integrated steel mill in Louisiana by 2029, aiming to start production in the same year.

The companies also said they will develop high-value-added products and enhance technological capabilities to cut manufacturing costs, strengthening their competitiveness in the global market.

In a positive sign, the overall prices of steel products have sharply increased in the U.S. market following the imposition of 25 percent tariffs on steel and aluminum imports, analysts said.

"Even with tariff-adjusted prices, Korean steelmakers are not expected to suffer massive losses in the U.S. market," Kim Jin-beom, an analyst at Sangsangin Securities, said.

Cold-rolled coil products had usually been traded at $600-$700 per ton in the U.S. market, but their prices jumped to $975 a ton last week, according to Kim.

Korean steel firms have mainly exported hot-rolled coil, cold-roll coil and steel pipe products to the United States under an annual quota system.

Korea previously benefited from a duty-free quota under the first Trump administration.

At the time, the United States waived tariffs on Korean steel products in exchange for a yearly import quota of 2.63 million tons, which accounted for about 70 percent of Seoul's average export volume between 2015 and 2017.

The quota was immediately abolished after the United States began imposing 25 percent tariffs on all steel and aluminum imports last month.

"We will promote a more diversified product lineup for U.S. customers as the quota has been lifted," the Hyundai Steel official said.

Yonhap