By Hyunjoo Jin and Jihoon Lee
SEOUL (Reuters) – South Korea’s acting President Choi Sang-mok on Tuesday said his government would seek talks with the U.S. administration about Washington’s 25% tariffs on steel and aluminium imports to reflect the interests of its companies.
The CEOs of 20 major South Korean conglomerates plan to visit the United States in the near future, while the government also intends to discuss response measures with Japan and the European Union, Choi said.
The government is making an “all-out effort” to build close ties with U.S. President Donald Trump’s administration to protect the interests of South Korean companies, Choi said.
Earlier on Tuesday, Trade Minister Cheong In-kyo said that Trump’s 25% tariffs due to come into force in March would reduce U.S. steel demand and erode steel exporters’ profitability.
He said, however, the tariffs may offer opportunities for Korean companies to find new export markets.
South Korea would “actively consider” whether there is room for negotiation on the tariffs, Cheong said, despite Trump’s pledge on Monday that the higher tariffswould come in “without exceptions or exemptions”.
Cheong was speaking at a meeting with officials from steel companies in Seoul.
South Korean steelmakers extended losses on Tuesday. POSCO Holdings closed down 0.8%, falling for a second straight day, and Dongkuk Steel Mill fell 0.9% to close at a three-month low, while the broader KOSPI market rose 0.7%.
South Korea is the fourth biggest exporter of steel to the United States, behind Canada, Mexico and Brazil last year, according to American Iron and Steel Institute data.
2018 EXEMPTIONS
During Trump’s first term in 2018, South Korea and the United States agreed on an annual duty-free steel quota of 70% of volumes shipped to the U.S. on average from 2015-17.
The deal made South Korea the first U.S. ally to secure an indefinite exemption on the steel tariffs.
“Thus, we see room for negotiation with the second Trump administration if necessary,” Citi said in a report.
Citi estimates that the latest U.S. steel tariffs will have a negative impact on South Korea’s economy by around 0.11% to 0.22% of gross domestic product.
European Union trade ministers will hold an unscheduled video conference on Wednesday to discuss the bloc’s response to impending U.S. steel and aluminium tariffs, EU diplomats said on Tuesday.
(Reporting by Hyunjoo Jin, Hyunsu Yim and Jihoon Lee; Editing by Ed Davies, Kate Mayberry and Kim Coghill)
