South Korea’s steel industry continues to seek a resolution to punitive US trade measures, despite the lack of progress in recent high-level talks. Expectations that a bilateral summit in Washington could ease the Trump administration’s 50% import tariffs were not fulfilled, leaving South Korean producers exposed in one of their most important export markets.
Following a July agreement that reduced tariffs to 15% for some industrial and automotive goods, hopes were high that similar relief might be extended to steel. However, the meeting between President Lee Jae Myung and US President Donald Trump on August 25 yielded no such outcome. South Korean mills, which once benefited from a duty-free quota under Section 232, have been subject to a 25% tariff since March 12, doubled to 50% in early June.
Data from the International Trade Administration shows that US imports of South Korean steel fell by 13.8% year-on-year in the second quarter. However, a notable surge in July, up 62.1% compared to the same month last year, pushed year-to-date volumes slightly into positive territory at 1.58 million tonnes – an increase of 0.9%.
According to respondents in MEPS’s latest International Steel Review, South Korean producers are now focused on exporting niche, high-value products to the US, often only if customers agree to share the burden of tariffs. Despite this, many sales are reportedly operating at breakeven or below production cost, due to both the tariffs and weak domestic demand.
MEPS steel market analyst Chris Jackson described the outcome of the Washington summit as a "hammer blow" for South Korean mills, noting that the sector has already been strained by a prolonged downturn in local construction. Official data shows that construction output in South Korea fell for the 15th consecutive month in June, down 12.7% year-on-year. MEPS pricing data also indicates that hot rolled coil prices in South Korea have been flat for three months, sitting just above the lows of late 2024.
“The burden on overseas sales has never been greater,” Jackson said. “Producers are urgently seeking alternative export markets, but opportunities remain scarce given the uncertain global trade environment.”
To mitigate long-term tariff exposure, Hyundai Motor Group and Posco Group recently confirmed plans to build a joint electric arc furnace mill in Louisiana, scheduled to start production in 2029 with a capacity of up to three million tonnes annually. Much of the output is intended for Hyundai’s automotive operations in the US.
A broader South Korean pledge to invest USD 350 billion in US-based manufacturing – including shipbuilding and nuclear technologies – formed a key part of the overall trade agreement signed this summer. Nonetheless, domestic trade unions have expressed concern over the offshoring of production capacity and the potential loss of high-skill jobs in Korea’s industrial core.
Despite the setbacks, Jackson sees potential for a revised deal in the future. “While steel was not directly addressed in the recent trade pacts, South Korea’s substantial investment commitments in the US could create political momentum for a targeted steel agreement in the months ahead.”
Further insight into the South Korean steel market and global trade dynamics is available in MEPS’s International Steel Review, which features price trends, forecasts and industry commentary from key global regions. Visit mepsinternational.com for subscription details.