U.S. President Donald Trump speaks in the Oval Office at the White House in Washington, D.C., March 6. Reuters-Yonhap
Korean steel companies said Friday they will closely cooperate with the government and related agencies to minimize the impact of planned U.S. tariffs on all steel and aluminum imports from next week.
U.S. President Donald Trump has announced a series of levies on some of his country's trading partners, including Canada and Mexico, since taking office in January.
Among them are 25 percent tariffs on steel and aluminum imports from March 12 (U.S. time).
In late February, Korean officials requested an exemption from the tariffs on steel and aluminum during their visit to Washington, but to no apparent avail.
Seoul's responses to the Trump government's latest tariff plans have been affected by a political turmoil sparked by President Yoon Suk Yeol's brief martial law imposition in December.
POSCO and Hyundai Steel, the country's two biggest steelmakers, said they are planning to consult with the government, the Korea Iron & Steel Association (KISA) and other related agencies to cope with the upcoming tariffs.
"We are considering several options, including building a steel plant in the United States, in response to the tariffs," a POSCO spokesperson said over the phone.
He did not elaborate on the steel mill plan and other options.
"Hyundai Steel expects the U.S. imposition of sweeping tariffs on steel imports will have a negative impact on the steel industry in the long term," a company spokesperson said.
SeAH Steel Holdings, which has a U.S. production facility of oil country tubular goods (OCTG) used for extraction in oil fields, said it also expects the upcoming tariffs will deal a blow to its business.
The holding firm's steel unit, SeAH Steel, sold one-fourth of its annual steel pipe production of 1 million tons in the U.S. last year.
Steel products are piled up at a port in Pyeongtaek, south of Seoul, Feb. 11. Yonhap
Under the Korea-U.S. free trade agreement, almost all tariffs between the two countries have already been eliminated.
During his first term, Trump imposed 25 percent tariffs on all steel imports to the U.S. in 2018, citing national security concerns.
At the time, the U.S. waived the tariffs on Korean steel products in return 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.
If the new tariffs are imposed, the quotas will be immediately abolished.
Korea was the fourth-largest exporter of steel to the U.S. last year, accounting for some 11 percent of Washington's steel imports, according to data from the U.S. International Trade Administration.
The country was also the fourth-biggest exporter of aluminum to the U.S., taking up about 4 percent of the U.S.' aluminum imports.
Meanwhile, Trump has again delayed tariffs on Mexican and Canadian goods that are covered under a trade agreement among the three countries until April 2.
Early last month, Trump announced the tariffs on Canada and Mexico, highlighting the need to stop an inflow of undocumented migrants and illicit drugs to the U.S.
He then agreed to the initial one-month pause, as the U.S.' two largest trading partners pledged to ramp up efforts to prevent drug trafficking.
On Friday, shares in POSCO Holdings, the holding company of POSCO Group, jumped 7.28 percent to 317,000 won and Hyundai Steel advanced 8.7 percent to 31,850 won. The broader Korea Stock Price Index (KOSPI) fell 0.49 percent.
In spite of planned tariffs, steel stocks jumped on the possibility of their joining the Trump government's natural gas pipeline project in Alaska, analysts said.
Trump mentioned Korea and Japan as countries interested in the "gigantic" project during his address to a joint session of Congress this week. (Yonhap)
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