Korea's steel export trends after the US blanket tariff announcement and policy implications

Jae Yoon Lee and Go Eun Lee
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Jae Yoon Lee: Korea Institute for Industrial Economics and Trade
Go Eun Lee: Korea Institute for Industrial Economics and Trade

No 2, i-KIET Issues and Analysis from Korea Institute for Industrial Economics and Trade

Abstract: Under the authority of Section 232 of the Trade Expansion Act, on February 10, 2025, US President Donald Trump announced the repeal of existing exemptions and waivers for tariffs on steel, aluminum, and related products, introducing a uniform 25 percent tariff without exception. The measure went into effect on March 12.

South Korean steel exports were already in decline; US tariffs have only intensified the concerns of a major downturn. - From January to April, South Korean steel exports to the US plunged by 10.2 percent year-on-year (YoY). Exports to the rest of the world fell by 2.6 percent YoY.

Yet, the effects of the Trump tariffs have yet to fully manifest, as the recent slump in exports to the US is largely attributable to the base effect. - The pronounced YoY decline reflects exceptionally strong export performance to the US during the same period in 2024, when exports reached their highest levels since 2018.

While exports of key general-purpose items such as hot-rolled steel sheets and heavy plates fell significantly, products upon which the US remains dependent — such as steel pipes, surface-treated steel sheets, and tin-plated sheets, and specialty steel — maintained solid performance. - The impact of potential tariffs under the new Trump administration is expected to vary by product category. - As of 2023, US import dependency remained relatively high for steel pipes and tin-plated sheets. It was not as dependent on imports for general-purpose steel products, such as hot-rolled sheets and heavy plates.

Caution is needed regarding the potential adverse effects of tariffs, particularly in the general-purpose steel segment. - Now that the US has eliminated import quotas, Korean steelmakers are likely to face intensified price and market competition with other tariff-affected countries, such as Taiwan and Vietnam. The application of a flat 25 percent tariff could place Korean products at a disadvantage in terms of price competitiveness. Although the removal of quota protections may increase short-term pressure on steel exports, it is essential for Korea to respond by optimizing its export strategies and enhancing the competitiveness of its products.

Keywords: US tariffs; steel; steel industry; steel exports; trade; international trade; Trump; Trump tariffs (search for similar items in EconPapers)
JEL-codes: F52 F62 L61 (search for similar items in EconPapers)
Pages: 6
Date: 2025-05-21
New Economics Papers: this item is included in nep-inv
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