Affected by US tariffs, South Korean steel giants declare a state of "emergency management"

The South Korean steel industry is facing severe challenges. According to recent reports from several South Korean media outlets, Hyundai Iron and Steel Company, the second-largest steel manufacturer in South Korea, recently announced that it has entered an "emergency management" state. South Korean media analysis indicates that the pressure on the South Korean steel industry is closely related to the US tariff policy.

According to The Chosun Ilbo, based on a comprehensive assessment of the domestic and international market environment, senior executives of Hyundai Iron and Steel Company said that the company has no choice but to take a series of measures to cut costs, including reducing executive salaries by 20%, implementing a voluntary retirement plan for employees, scaling down the operations of some factories, and reducing overseas business trips.

South Korean media reported that Hyundai Iron and Steel Company is facing multiple setbacks from the sluggish domestic construction market, competition from foreign steel products, and strikes by labor unions. On the 12th of this month, the policy of the United States imposing a 25% tariff on imported steel and aluminum products officially came into effect, further exacerbating the business environment. Yonhap News Agency reported that as the second-largest steel manufacturer in South Korea, Hyundai Iron and Steel's predicament reflects the increasing pressure faced by the South Korean steel industry.

The Impact of US Tariff Policy on the South Korean Steel Industry

Data from the International Trade Administration (ITA) of the US Department of Commerce shows that among last year's steel-exporting countries to the US, South Korea ranked fourth in terms of export volume, following Canada, Mexico, and Brazil. According to data from the South Korean steel industry and the Korea Trade Association, last year, exports to the US accounted for approximately 13% of South Korea's total steel exports. Under the Korea-US Free Trade Agreement signed by the two countries in 2018, South Korea was eligible for an annual duty-free quota of 2.63 million tons of steel exports to the US, but this quota has now been cancelled.

Due to insufficient resources and response capabilities, the tariff policy has had a more severe impact on small and medium-sized South Korean steel and aluminum enterprises. YTN Television in South Korea reported that it is estimated that about 1,800 small and medium-sized enterprises in South Korea are affected by the US tariffs. The government has planned to provide support to these enterprises. It is predicted that the US tariff policy may impose a burden of over 1.2 trillion won (approximately 6 billion yuan) on the South Korean steel industry.

South Korean Officials Urge the US to Grant Tariff Exemptions to South Korea

In the face of pressure from the US tariff policy, Zheng Renjiao, Director-General of the Trade Negotiations Bureau of the Ministry of Trade, Industry and Energy of South Korea, recently visited the United States and held talks with US Trade Representative Jamie Gerrill.

Zheng Renjiao, Director-General of the Trade Negotiations Bureau of the Ministry of Trade, Industry and Energy of South Korea: We have submitted a request to the Office of the US Trade Representative, asking for tariff exemptions or at least non-discriminatory treatment.

Reprinted from: CCTV News. If there is any infringement, please contact us for deletion.