EU tariffs target 'strong Republican states', Korea 'strengthens US imports'
The European Commission announced that it would target 'strong Republican states' and 'countries with traditionally strong US exports' as a countermeasure to Trump's tariffs, which Korea pointed out, and the Korean government announced a strategy of 'expanding US imports' instead of 'requesting special measures'.
On the 11th, the White House said in a fact sheet that "President Trump's decision to close existing loopholes and exceptions will strengthen the US steel and aluminum industries" and "Hyundai Steel recently announced that it is actively considering building a steel plant in the US."
The Korean media reported on the 12th that “the White House emphasized that the Trump administration first imposed tariffs on steel and aluminum, which led to a decrease in related imports by nearly a third in 2020 compared to four years ago,” and “the tariffs led to the construction of new plants worth more than $10 billion across the U.S.,” mentioning Hyundai Steel, and that Hyundai Steel is considering building a production plant in the U.S. to supply automotive steel plates to the Americas.
The Korean media then reported that “if Hyundai Steel’s plan to build a local steel mill in the U.S. is confirmed, the industry predicts that it will be a large-scale investment of millions of tons per year and 10 trillion won in investment.”
On the 12th, POSCO Chairman Lee Hee-keun told the Seoul Economic Daily that “just like during Trump’s first term, we have no choice but to respond flexibly,” and that “we will overcome the crisis well through various measures to strengthen competitiveness,” indicating that this is a reenactment of the government-led “special consultation for Korea” similar to the first term.
Yonhap News reported on the 12th that “President Trump ordered the quota to be scrapped and a 25% tariff to be applied to Korean steel starting on the 12th,” and “President Trump initially said there would be no exceptions to the tariffs, but he has revealed that he is considering exemptions for Australia, raising speculation that competition between countries to secure tariff exemptions could intensify.”
Yeo Han-goo, a senior researcher at the Peterson Institute for International Economics (then head of the trade negotiation headquarters in his first term), said in an interview with Yonhap on the 11th that “in order to obtain tariff exemptions on steel through negotiations like during Trump’s first term, trade experts have suggested that we should utilize investment in the US and defense industry cooperation to persuade the US,” and suggested that “we should somehow connect with investments or defense industries that the US is interested in, and create a logic that we should also be granted an exception.” A high-ranking official from the Korean government told Etoday on the 14th of last month that “we are considering expanding imports of US products as an alternative to expanding imports of US products.”
The Chosun Ilbo called for a “quick and close bandwagon” in an editorial on the 3rd, saying, “We must build a bilateral cooperation model and get on board the Trump administration’s ‘America First’ strategy before our competitors.”
European Commission President Ursula von der Leyen said on the 11th that in response to U.S. President Trump’s announcement of tariffs on steel and aluminum, “the EU will act to protect its economic interests,” and “it will trigger a strong response from the 27-nation bloc.”
AP reported that Commissioner Leyen’s remarks “mean that iconic American industries such as bourbon, jeans, and motorcycles should be careful,” and “although the European Commission has not clearly stated the application of the response, officials and observers say that it will target Republican-leaning states in the U.S. and countries where U.S. exports are traditionally strong.”
Commission President von der Leyen said, "Tariffs are like taxes, bad for companies and even worse for consumers," and added, "Unfair tariffs on the EU are not without solutions, but will trigger firm and proportionate countermeasures," applying the "principle of proportionality" as a countermeasure.
Bernd Lange, the chairman of the European Parliament's Trade Committee, said on the 11th, "The previous trade measures were merely suspended and can easily be revived legally," and "if he (Trump) starts again now, we will of course immediately resume our countermeasures. All kinds of products that also affect American exporters, such as motorcycles, jeans, peanut butter, bourbon, whiskey, etc.," he told German radio rbb24.
German Chancellor Olaf Scholz, the EU's largest economy, told parliament on Monday that "if the United States leaves us no other choice, the EU will react with unity," and that "in the end, a trade war always robs both sides of prosperity," the AP reported.
European steel companies are bracing for losses from President Trump's 25% tariffs on foreign steel and aluminum.
“This will further worsen the situation for the European steel industry and will worsen an already difficult market environment,” Henrik Adam, president of the European Steel Association, told the AP. “The EU could lose up to 3.7 million tonnes of steel exports. A significant portion of these exports cannot be compensated for by the EU exporting to other markets.”
The United States is the second-largest export market for EU steel producers, accounting for 16 percent of total EU steel exports.
“These tariffs are economically counterproductive,” European Commission Vice President Maros Sefcovic told the AP, “especially given the tightly integrated production chains built on extensive transatlantic trade and investment relations. We will protect workers, businesses and consumers.”
“This is not our preferred scenario,” he added. “We are committed to constructive dialogue,” he told the AP. “We are ready to negotiate and, if possible, find a mutually beneficial solution.”
He told the EU legislature that day that “the EU and the United States have about $1.5 trillion in trade, which is about 30% of global trade,” and that “there is a lot at stake for both sides.”
The AP said that “the EU has a significant export surplus in goods, but that is partly offset by the US trade surplus in services,” and that “the EU’s trade surplus in goods is expected to be €851 billion ($878 billion) in 2023, while the EU’s trade surplus is expected to be €156 billion ($161 billion), while the EU’s trade deficit is expected to be €104 billion ($107 billion) in services, compared to €688 billion ($710 billion) in goods.”
President Trump said late on the 10th that he would revise the existing US tariffs on aluminum. The proclamation raises tariffs from 10% to 25%, repeals country-specific exceptions and quota agreements, and eliminates hundreds of thousands of product-specific tariff exemptions for the two metals.
The measure, which is scheduled to take effect March 12, will apply to millions of tonnes of steel and aluminum imported from South Korea, Canada, Brazil, Mexico and other countries.
A White House official told Reuters on Tuesday that the 25% tariffs on steel and aluminum imports planned by President Trump would be added to other tariffs on Canadian products, bringing the total tariff threat to 50% on all Canadian imports if enacted in March.
Vance was scheduled to discuss trade and economic issues with European Commission President Ursula von der Leyen at the Paris summit, Reuters reported, adding that the 27-nation bloc would take “firm and proportionate measures” in response to the new tariffs.
Reuters reported that Vance had been scheduled to discuss trade and economic issues with European Commission President Ursula von der Leyen at the Paris summit.
“A wide range of companies, from Coca-Cola and Ford to smaller aluminum, aerospace and appliance companies, are expected to be affected by Trump’s actions,” the statement said.
Ford CEO Jim Farley said Trump’s actions have “inflicted a lot of cost and a lot of disruption” on U.S. businesses so far.
“Failure to include a viable exclusion process will hurt U.S. manufacturers, especially small and midsize businesses that pay far more for the inputs they produce,” the coalition of metal manufacturers and users (CAMMU) said in a statement. “Foreign customers are shifting their supply chains away from U.S. producers. Once removed, it is difficult for small, family-owned businesses to regain lost business, and the threat of retaliatory tariffs from major trading partners further threatens U.S. exports and manufacturing jobs, delays expansion plans and forces difficult choices about investment, retention and long-term growth.”
Citing data from the American Iron and Steel Institute, Reuters reported that “steel imports accounted for about 23% of U.S. steel consumption in 2023, with Canada, Brazil, and Mexico being the largest suppliers, and Canada accounting for nearly 80% of U.S. primary aluminum imports in 2024.”
During Trump’s first term, Korea had been subject to a separate agreement on a steel and aluminum quota system that allowed up to 2.63 million tons of steel products exported to the U.S. to be exported tax-free under the “special economic treatment for Korea due to security” in 2018.
With President Trump’s recent tariff measures, the Korean steel industry will be subject to a 25% tariff in the U.S., its largest export market. As of last year, steel exports to the U.S. amounted to $4.347 billion (KRW 6.3 trillion).