The White House announced on March 1 that it would impose a 25% tariff on steel imports from twelve countries, including South Korea, starting next week.
Last week, the U.S. Department of Commerce had announced a list of countries that may be hit with the new tariffs and reasoned that it would protect domestic steel production. Included on the list of 12 countries is South Korea, which had exported 3.6 million tons of steel products to the United States in 2017 — making it the third largest steel exporter to the United States. President Trump is expected to sign the executive order next week.
The South Korean steel industry is expected to take a significant hit as a result. According to the Korea International Trade Association (KITA), steel export to the United States involved roughly 155,000 jobs in 2017. The Hankyoreh reported that the measure could immediately jeopardize the jobs of 15,000 workers.
The announcement of the impending steel tariff comes after trade restrictions were imposed at the end of January on other South Korean products including washing machines and solar panels. In the next several years, washing machines from South Korea will face as high as a 50% tariff and solar panels as high as 30%. South Korea’s Trade Minister Kim Hyun Chong has been in Washington since February 25 to meet with U.S. officials about minimizing the impact of the new measures.
Such protectionist measures by the United States could create uncertainty for the future of the Korea-U.S. Free Trade Agreement (KORUS FTA), signed in 2007 and implemented in 2012. Trump has been vocal about his dissatisfaction with the KORUS FTA, which he has blamed for increasing the U.S. trade deficit. The two sides have been in talks to amend the deal since January and will head into their third round of negotiations this month.
South Korean President Moon Jae-in has ordered his administration to use all available means to challenge unfair trade policies by the United States. “I want you to confidently and resolutely deal with unfair trade protectionist measures by considering filing a formal complaint with the WTO and reviewing possible violation of the Korea-U.S. free trade agreement,” he reportedly said in a recent meeting with top aides.
By ZoominKorea staff
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