Korean steelmakers said on March 2 that they would seek measures to counter or at least mitigate the impact of the recent heavy tariffs proposed by US President Donald Trump on all imported steel products.
POSCO, the nation’s largest steelmaker, is gearing up efforts to request state governments for tax exemptions in case Trump’s order takes effect.
“The tariffs may have a high influence (damage) on the supply and price of materials of POSCO products in US and, therefore, on domestic industries, including automobiles and appliances that require steel,” said a POSCO spokesperson.
|POSCO's Seoul headquarters.|
“We will work harder to call on the US government and related industries to exclude materials used by POSCO in the US from the tariffs,” he said.
POSCO has set up two companies in the US, both joint ventures, that process steel products with raw materials shipped from Korea.
On March 1, Trump told reporters that the US would impose a 25 percent tariff on imported steel products. The US president is expected to sign an order to impose the tariffs next week. Korea is the third-biggest steel exporter to the US, after Canada and Brazil.
Currently, 88 percent of Korean steel exports to the US already face antidumping tariffs or countervailing duties. Due to these protectionism measures, Korean steel exports to the US declined 37.8 percent between 2014 and 2017.
The local steel pipe industry will be hit hardest, industry watchers say. Their exports to the US account for more than half of Korea’s total steel exports to the country, which stand at around an annual US$3.2 billion.
“Still, we hope there will be some changes when a final decision is made next week,” said one executive from a Korean steel pipe company.
There could some changes in the policies due to strong resistance from Washington’s trading partners. Canada and the EU have said they would bring forward countermeasures, while Mexico, China and Brazil have also said they are considering retaliation.
The Korean government said Trade Minister Kim Hyun-chong visited the US over the weekend to meet Gary Cohn, chief economic adviser to President Donald Trump, and US Secretary of Commerce Wilbur Ross to raise trade law issues and called for new measures that can minimize damage to Korean companies.
Some industry watchers note that that the protectionist measures would ultimately raise global steel prices and offset the losses of Korean steel makers.
“US steel makers are likely to respond by raising prices instead of increasing capacity. This will push up the prices of US and global manufactures, and again increase the global steel prices, which could then offset the losses for the local companies,” said Baek Jae-seung, an analyst at Samsung Securities.
By Shin Ji-hye/The Korea Herald (email@example.com