Following the shooting incident involving former U.S. President Donald Trump and President Joe Biden stepping down from the Democratic presidential candidacy, the likelihood of Trump’s election has increased. This has caused tension in the South Korea’s steel industry.
According to industry sources, the South Korean steel industry is closely monitoring the impact of a potential Trump re-election, particularly regarding the likelihood of increased trade sanctions. By implementing trade barriers, Trump intends to lower the trade deficit and stimulate the U.S. economy.
Previously, Trump announced a blanket 10% tariff on all imports and tariffs exceeding 60% on Chinese imports. His tariff-first, “America First” trade policy includes increasing steel tariffs and import regulations.
If Trump is re-elected, these policies could be reinforced, acting as trade barriers for the South Korean steel industry. Such international trade regulations could hinder the ability of South Korean steel companies to enter overseas markets. There are projections that trade tensions will escalate due to heightened trade pressure on countries, including South Korea and Japan.
The South Korean steel industry is in a slump due to an oversupply of low-priced steel products from China, driven by a real estate downturn and sluggish South Korean demand. This trend of low-cost Chinese steel is expected to continue into the year’s second half. Should Trump be elected, South Korean steel companies may face increased pressure from falling prices.
In particular, the steel sector is concerned that Trump’s tariff policies might exacerbate China’s dumping strategies. China may bolster its dumping tactics, exporting products at low prices without considering profitability to win in international competition.
The Korea Institute for Industrial Economics and Trade recently indicated that “Trump is likely to strengthen traditional trade barriers under Section 232 of the Trade Expansion Act, targeting major steel producers such as South Korea, Japan, and China.” The report also noted, “Currently, South Korea faces export quotas instead of tariffs. Lifting these quotas could harm exports due to ties with China. If Chinese steel exports to the U.S. decrease sharply in the short term, there is a risk of dumping by South Korea and other major countries, necessitating proactive measures.”
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