Hopes that recent trade talks between the United States and South Korea could lead to a reduction in the 50 percent tariffs on steel imports imposed by the Trump administration seem to have come to nothing.
At the end of July, South Korea successfully negotiated a 15% "reciprocal" tariff rate for the United States and the rate for exports of the automotive sector will be 15%, compared with the previous 25%. But during the personal talks between President Trump and South Korean President Lee Jae-myung on August 25, it was not possible to achieve a reduction in the steel rate.
South Korean steel producers, who had previously been granted an exemption under Article 232 under the duty-free quota, lost their competitive advantage in one of their key export markets when the United States imposed a 25 percent tariff on March 12. On June 4, this rate was doubled to 50%. This created a "level playing field" for suppliers from third countries, as a result of which South Korean factories found themselves in competition with other East Asian manufacturers for low prices.
Imports of South Korean steel to the United States decreased by 13.8% year-on-year from April to June. However, preliminary data released by the Office of International Trade shows that in July, imports of South Korean products to the United States increased by 62.1% year-on-year, while volumes increased by 0.9% year-on-year to 1.58 million tons.
Due to the severity of the trade measures imposed, South Korean steel producers are likely to export steel at zero profitability or below their production costs. European Parliament respondents say that many of them are now focusing on selling high-quality specialty products to American customers and, in some cases, only if the buyer agrees to pay part of the tariff costs.
South Korean manufacturers are looking for new export markets
Chris Jackson, a steel market analyst from the European Parliament, said that the negative impact of US tariffs on South Korean steel producers has increased due to lower domestic demand. Jackson called the lack of any tariff relief after President Lee Jae-myung's visit to the White House a "devastating blow" to South Korean steel mills, which previously maintained close trade ties with the United States.
Steel prices are published in the MEPS International Steel magazine. The survey showed that prices for hot-rolled coils in South Korea remained unchanged for the third month in a row in August. The base price for a hot-rolled roll was only $40 per ton, which is higher than the almost four-year low recorded in October 2024. In addition, prices for medium profiles and beams were at their lowest level since April 2021.
