Steel companies in South Korea and Vietnam faced big losses on Monday after U.S. President Donald Trump announced he would double tariffs on steel and aluminium imports to 50%. These new tariffs are set to start on June 4 and come as part of an escalating global trade conflict.
Trump made the announcement just hours after accusing China of breaking an agreement with the U.S. that aimed to reduce tariffs and trade restrictions on important minerals. This sudden decision caused concern in many countries that export steel to the United States. South Korea and Vietnam are major exporters of steel to the U.S., but with the new tariffs, selling their steel in America has become much more expensive. This could hurt their businesses and cause them to lose customers or raise prices.
Stock Prices Slide Across Asia
Right after Trump’s tariff announcement, the stock prices of steelmakers in South Korea and Vietnam dropped sharply. Shares of South Korea’s POSCO fell by 3%, Hyundai Steel dropped 3%, and SeAH Steel Corp saw a larger fall of 6.3%. Vietnam’s major steel companies also suffered losses. Hoa Sen Group shares dropped 2.8%, Nam Kim Steel fell 3.4%, and Vietnam Steel Corp lost 2.7%.
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Vietnam’s steel exports to the U.S. had already dropped by 27% during the first four months of this year. The new 50% tariff will make it even harder for Vietnamese companies to compete. The South Korean government reacted quickly. The Industry Ministry held an emergency meeting with officials from POSCO, Hyundai Steel, and other major companies to figure out how to handle the new tariffs. They said they would work hard in trade talks with Washington to reduce the impact on their steel industry.
Tariff Hikes and Industry Uncertainty
Trump first imposed steel and aluminium tariffs of 25% in March, shortly after returning to office. Now, by doubling those tariffs to 50%, he has made it more costly for exporters to sell steel to the U.S. Chelsea Ye, a senior analyst at metals research firm McCloskey, said these frequent changes in tariff policy create a lot of uncertainty. She believes the final impact might be smaller than first expected because Trump’s policies have sometimes reversed or softened before. South Korean steel exporters have tried to avoid raising shipments too quickly to the U.S. to escape extra scrutiny. But the new tariffs could be a big burden unless U.S. steel prices go up even more. One industry executive, who spoke anonymously because of the sensitivity, said the tariffs would make things difficult for exporters if prices don’t increase. Despite tariffs, South Korea’s steel exports to the U.S. actually rose by 12% in April compared to last year, but that may change with the higher costs.
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The tariffs have also raised steel prices in the U.S., which affects many industries, including car manufacturers, home appliance makers, and construction companies. Higher steel prices can slow production and increase costs for American consumers.
Trade Talks and Industry Responses
South Korea is trying to get an exemption from the tariffs through trade talks. However, progress is slow partly because of political uncertainty before upcoming elections. Hyundai Steel announced plans to build a $5.8 billion factory in Louisiana to avoid tariffs, but it won’t open until 2029.
POSCO has also signed a preliminary deal to invest in this factory project. India, which exports a lot of aluminium to the U.S., is also feeling the impact. B.K. Bhatia, director-general of the Federation of Indian Mineral Industries, said the tariffs will hurt India’s aluminium business, but government talks with the U.S. give some hope that tariffs might be lowered.
Thaiseer Jaffar, founder of Global Steel Summit, explained that the tariff hike will force sellers and U.S. buyers to renegotiate who will pay the extra 25% cost on steel imports. The U.S. is the world’s biggest steel importer outside the European Union, bringing in more than 26 million tons last year. The sharp tariff increase is expected to shake up the global steel market and put pressure on exporters and buyers alike.
