Emergency Meeting on Rising TariffsSouth Korea’s Ministry of Trade, Industry and Energy held an urgent meeting on Monday with the country’s top steel producers, including POSCO Group and Hyundai Steel Co. The gathering was organized to assess and address the serious threat posed by the United States’ plan to double its steel import tariffs to 50% starting later this week. The ministry emphasized the urgency of the situation, noting that such an abrupt move by Washington could have deep repercussions on South Korea’s steel export sector.

Major Companies Voice Deep ConcernExecutives from POSCO, Hyundai Steel, and other key players in the steel industry voiced their concerns during the meeting. They urged the government to maintain constant communication and provide timely updates on US trade actions. The industry’s dependence on exports, especially to the US market, makes such tariffs a significant challenge. With over one-fifth of their steel exports heading to the United States, a 50% tariff could price Korean products out of the market entirely.

Steel Exports Already in DeclineOfficial figures released during the discussions show a sharp decline in steel exports. In May, South Korea's overall steel exports fell by 12.4% compared to the same period last year, amounting to $2.6 billion. More notably, shipments to the US dropped by 20.6%, reflecting early signals of market strain even before the new tariffs are implemented. The trend has sparked fears of broader economic consequences in sectors tied to steel manufacturing.

Trade Talks with Washington in FocusSouth Korea's government pledged to intensify diplomatic efforts to engage Washington through trade negotiations. Officials from the Trade Ministry stated that ongoing dialogues would focus on seeking exemptions or moderated terms for Korean steel under existing trade frameworks. Seoul aims to highlight the longstanding economic partnership and the integrated nature of supply chains between the two countries.

Call for Public-Private CooperationThe Trade Ministry emphasized the importance of cooperation between the government and private companies. A coordinated strategy would allow for faster responses and better protection of national interests. Industry representatives also called for establishing an emergency response committee that includes government, business, and trade law experts to navigate any upcoming disruptions.

Economic Ripple Effects Beyond SteelThe impact of the US tariffs is expected to cascade into other sectors such as automotive manufacturing, shipbuilding, and construction, industries that rely heavily on competitively priced domestic steel. Analysts warn of potential job losses and weakened competitiveness if Korean steel producers cannot maintain their foothold in the American market. Smaller suppliers within the steel supply chain may face severe financial distress.

Possible Countermeasures Under ReviewWhile the government refrained from announcing immediate retaliatory tariffs, officials confirmed that a range of countermeasures are under review. These include potential subsidies for affected steelmakers, accelerated approval for export diversification initiatives, and adjustments in customs procedures. The goal is to shield local firms from sudden revenue losses and preserve employment.

Long-Term Strategy for ResilienceFinally, the ministry acknowledged the need to strengthen the resilience of the country’s steel sector. Diversifying export markets, enhancing product quality, and investing in green steel initiatives using H₂-based processes are part of the broader roadmap. South Korea is also exploring partnerships with other steel-producing nations to form a unified front against protectionist trade policies.

Key Takeaways:

• South Korea's steel exports to the US fell by 20.6% in May, as concerns mount over the 50% US tariff.

• POSCO, Hyundai Steel, and the government agreed to collaborate on mitigation strategies through trade talks and domestic support.

• Broader industries like automotive and shipbuilding are expected to feel the ripple effects of the escalating steel tariff dispute.