Steel Producers Prepare for Trump's Tariffs with US Investments

Seoul, April 2 (NationPress) South Korean steel manufacturers are preparing for the extensive tariffs imposed by US President Donald Trump, with potential plans to establish production facilities within the United States, according to industry experts and market analysts on Wednesday.

Since taking office in January, Trump has introduced a series of tariffs on various trading partners.

In addition to the 25 percent tariffs on steel and aluminium imports that began in mid-March, his administration is poised to implement country-specific reciprocal tariffs on Wednesday (U.S. time) against “all countries.”

In light of these significant tariffs, the two largest steel producers in the country, POSCO Holdings and Hyundai Steel, are reportedly planning to construct steel mills in the U.S., as stated by experts and reported by the Yonhap news agency.

Hyundai Steel has recently declared an investment of $5.8 billion to develop an electric arc furnace-based integrated steel mill in Louisiana by 2029, aiming to commence production in that same year.

This facility, with an annual capacity of 2.7 million tons, is anticipated to provide steel produced in the U.S. not only for its affiliates, Hyundai Motor and Kia, but also for other car manufacturers operating in the world's leading automobile market.

“We will deliver automotive steel for the strategic vehicles manufactured by Hyundai and Kia in the U.S., while also seeking supply agreements with automakers in Latin America and Europe,” stated a Hyundai Steel representative. If constructed, the Louisiana facility will mark the company's inaugural overseas steel production site.

Hyundai Steel's project aligns with the parent company Hyundai Motor Group's broader $21 billion investment initiative in the U.S., a response to Trump's escalating tariff measures.

Local industry leader POSCO has stated it is evaluating investment strategies for “upstream steel processes” in both the U.S. and India.

In a recent message to employees, POSCO Group Chairman Chang In-hwa mentioned, “Recognizing the urgent need to act now to avoid falling behind, we must invest in steel mills in rapidly growing and profitable regions such as the U.S. and India for substantial results.”

While POSCO has yet to finalize its decision regarding the U.S. plant, the company plans to concentrate on developing high-value-added products and enhancing its technological prowess to further reduce manufacturing costs and ensure unmatched competitiveness in the global market, as stated by Chang.

In October, POSCO entered into an initial agreement with India's largest steel producer, JSW Group, to collaboratively construct a 5 million-ton-a-year integrated steel facility.

According to data from the U.S. International Trade Administration (ITA), South Korea was the fourth largest exporter of steel to the U.S. last year, comprising 9 percent, or $2.9 billion, of Washington's steel imports. The country also ranked as the fourth largest exporter of aluminium to the U.S., accounting for approximately 4 percent of the U.S.'s aluminium imports.