What Trump's 25% tariffs mean for S. Korea's steel, automobile industry

And Monday's announcement is another red flag for South Korea, as Trump said himself that there will be no exceptions or exemptions.

How big of a blow will it be this time?

Lee Soo-jin reports.

South Korean companies are bracing themselves for the potential impact of Trump's universal tariff threat on their production costs and global competitiveness.

"Yeah. Any steel coming into the United States is going to have a 25% tariff. Aluminum too."

The import tax is drawing global attention because unlike last week's tariffs, this will be the first time in Trump's second term that a tariff measure is targeting all countries.

And Korea is one of those that is expected to be affected, as it is a major steel exporter to the U.S., and its car manufacturers with plants there rely on imported steel and aluminum for car production.

"Our main export items to the United States are items like vehicles and semiconductors. But if tariffs are imposed, the competitiveness of our products will likely take a big hit."

But this isn't the first time that Trump has imposed a 25 percent on all imports of steel, as he did so previously in 2018 during his first term.

South Korea at the time negotiated a deal with the Trump administration whereby it was granted a tariff-free quota for steel exports amounting to around 70 percent of the average amount of steel shipped annually to the U.S.

As anything above that limit was subject to the 25 percent tariff, it reduced the volume of steel imports from South Korea.

With universal tariffs also expected during his second term, Korean companies had already begun exploring ways to expand investments in the U.S. to minimize related risks.

Hyundai Steel, for one, is considering building a steel mill in the U.S. to produce automotive steel sheets, while Hyundai Motor Group plans to further expand local vehicle production there.

But compared to other nations facing a 50 percent tariff, the impact on Korea may be of less concern, according to the expert.

"While universal tariffs will directly impact our country, it's hard to say that we'll be more impacted than others as they target all nations."

The government, however,.. is remaining vigilant with the trade and industry ministry announcing on Monday that it plans to closely monitor the situation and work with the steel industry to come up with response measures.

Lee Soo-jin, Arirang News.