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Korea's steel industry braces for Trump's forthcoming 50% tariffs

Published: 01 Jun. 2025, 16:52 Updated: 01 Jun. 2025, 18:40

President Donald Trump dances after speaking at the U.S. Steel Mon Valley Works-Irvin plant, Friday, May 30, 2025, in West Mifflin. [AP/YONHAP]

Korea’s steel industry, already grappling with a prolonged slump, is facing a new blow as the United States — its largest export market — plans to double tariffs on foreign steel imports. U.S. President Donald Trump announced that the current 25 percent tariff will rise to 50 percent starting Wednesday.

The announcement, made during a speech at a U.S. Steel plant in Pennsylvania on Friday, is part of Trump’s broader push to strengthen the U.S. steel industry. He previously imposed the 25 percent tariff in March under Section 232 of the Trade Expansion Act, citing national security concerns.

“We're going to bring it from 25 percent to 50 percent — the tariffs on steel into the United States of America — which will even further secure the steel industry in the United States,” Trump said during his speech, later confirming the new rate via his social media platform Truth Social.

Industry analysts see the move as a tactic to pressure global steelmakers to invest in the United States. Trump also revealed that Japan’s Nippon Steel, which is pursuing a takeover of U.S. Steel, plans to invest $14 billion in U.S. facilities. Trump claimed that the move will "create and save over 100,000 American jobs."

Observers say the original 25 percent tariff failed to deter imports.

Because steel prices in the United States are 20 to 30 percent higher than in other markets, foreign firms have continued exporting there despite the tariff. According to the Korea International Trade Association, Korea’s steel exports to the United States in April — after the initial tariff — actually rose 11.7 percent year on year to 252,000 tons.

Steel products are stacked at Pyeongtaek Port in Gyeonggi on June 1. [NEWS1]

Steel products are stacked at Pyeongtaek Port in Gyeonggi on June 1. [YONHAP]

“Many believed the impact on exports would be limited due to the relatively high steel prices in the United States,” said Lee Jae-yoon, a senior researcher at the Korea Institute for Industrial Economics & Trade. “But if the tariff jumps to 50 percent, the damage to exports and the domestic spillover effects will be much greater.”

The Korean steel industry is now under serious strain. The United States accounted for 13.1 percent of Korea’s total steel exports in 2024 — $4.35 billion out of $33.28 billion. The Bank of Korea estimated last month that a 25 percent tariff would reduce Korea’s steel exports to the country by 1.4 percent this year. A higher tariff is expected to deepen that decline.

Posco and Hyundai Steel, Korea’s two largest steelmakers, plan to jointly build a steel plant in the United States to offset the tariff impact. In March, Hyundai Steel announced a $5.8 billion investment to build a steel facility in Louisiana. Posco later joined the project. However, commercial production is not expected until 2029, leaving Korean exporters vulnerable in the interim.

President Donald Trump speaks to reporters in the rain after arriving on Air Force One at Joint Base Andrews on May 30, 2025. [AP/YONHAP]

“It’s unclear whether we can sell to the U.S. market while absorbing a 50 percent tariff,” a steel industry insider said. “We’re reviewing various options, such as accelerating plant construction or securing alternative markets.”

Experts say Korea should seek item-specific tariff reductions through bilateral negotiations. Last month, Britain and the United States reached a deal under which British automobiles are subject to a 10 percent tariff — instead of 25 percent — on up to 100,000 vehicles annually.

“Although the U.S. Court of International Trade ruled last month that reciprocal tariffs were invalid, President Trump is showing that his tariff policy remains unchanged by pushing item-specific hikes," said Jang Sang-sik, director at the Korea International Trade Association’s Institute for International Trade. "Korea should focus on strategic sectors like shipbuilding and energy to secure low-tariff quotas through targeted negotiations.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY OH SAM-GWON [[email protected]]