US Tariffs Exacerbate Pressure on South Korean Steelmakers

The increase in US tariffs on steel and aluminum imports is expected to deal a severe blow to South Korean steelmakers, already struggling with oversupply and low prices amid the economic slowdown.

Local steelmakers, including POSCO Group and Hyundai Steel, are seeking ways to deal with the new US barriers, or at least minimize the impact of the heavy tariffs on their businesses.

In March, Hyundai Steel announced plans to invest $5.8 billion to build an integrated electric arc furnace steel mill in Louisiana by 2029. Production is scheduled to begin that year. The mill, with a production capacity of 2.7 million tons per year, is expected to supply steel not only to Hyundai Motor and its affiliate Kia, but also to other automakers in the United States. Its larger competitor, POSCO, has also decided to invest in Hyundai Steel’s US steel mill project, following the Trump administration’s decision to impose 25% tariffs on all steel and aluminum imports in mid-March. In North America, POSCO operates a steel processing center in the United States, along with a steel processing facility and an automotive steel plant in Mexico.

Industry experts say it will take time for steelmakers to recover from the prolonged economic downturn, as their main customers—construction and automotive companies—continue to face slowing demand and high US tariffs.

“Domestic steelmakers need to produce more high-quality products to overcome the current challenges, while the government must take measures to protect them from the influx of low-priced Chinese products,” said a steel industry official.