SEOUL - South Korea, the third largest exporter of steel to the United States, will continue to "actively reach out" to the US until a final decision on steel tariffs is made, said South Korea's Trade Ministry on Friday (March 2).
Trade Minister Kim Hyun Chong has been in Washington since Feb 25 to meet senior US officials to discuss trade issues including rising import restrictions.
South Korea shipped 3.6 million tonnes of steel products to the US last year - putting it third on the list of top exporters after Canada and Brazil. Steel pipes and plates made up 89.2 per cent of South Korean exports to the US last year.
Analysts said South Korea's steel industry, which is already struggling due to rising competition from China, will suffer even more if the US makes good its decision to slap a 25 per cent tariff on steel imports. A final decision is due next week.
Anticipating the move amid growing trade protectionism under the Trump administration, some local companies are reportedly considering moving their production lines to the US or diversifying their markets to other parts of the world, such as Europe and South-east Asia.
The news sent share prices of Korean steelmakers reeling on Friday morning. Posco, the country's biggest steel manufacturer, saw a 4.15 per cent drop in share prices just before noon, while its rival Hyundai fell 2.8 per cent.
While the impact of the steel tariffs alone is worrying, Dr James Kim of The Asan Institute for Policy Studies think tank said it also "sends an important signal" to the ongoing renegotiation of the South Korea-US (KORUS) free trade agreement signed in 2007.
"It seems to show the Trump administration means business when it comes to (making) adjustments on existing trade agreements," he told The Straits Times.
"South Korea will have to brace for impact there. Trump administration may demand things that would be difficult for South Korea to accept, and if that's the case, South Korea will have to make a decision whether to concede to the US demands or to do away with KORUS completely."