The South Korean government is scrambling to come up with measures to protect local steel manufacturers after U.S. President Donald Trump announced Thursday (local time) that he will impose a sweeping 25 percent tariff on all steel imports and a 10 percent tariff on aluminum imports.
“We will be imposing tariffs on steel imports and tariffs on aluminum imports,” Trump said at a meeting with steel industry executives at the White House, adding that he will sign it “sometime next week” and it will be in effect “for a long period of time.”
The Ministry of Trade, Industry and Energy convened an emergency meeting on Thursday led by Minister Paik Un-gyu and said that the Korean government will aggressively protest against the measure until the final ruling is made.
It also added that Trade Minister Kim Hyun-chong currently on a visit to the U.S. plans to meet with the National Economic Council director Gary Cohn, Commerce Secretary Wilbur Ross and other political figures to argue against the trade investigation results based on Section 232 of the Trade Expansion Act, a U.S. trade law that has been rarely applied since it was enacted in 1962. To impose tariffs based on this law, the U.S. government must prove that certain imports hurt the country’s national security. The Kim-led delegation is actively seeking ways to minimize damages to Korean companies, the ministry said.
Some market experts believe that Korean steel makers would be able to avoid the worst-case scenario with the 25-percent tariff option instead of country-specific steeper tariffs. But an official from the trade ministry said that the sweeping 25 percent tariff could also deal a harsh blow to the local steel manufacturers. The trade ministry earlier announced that it would file a petition with the World Trade Organization (WTO) if the U.S. applies steep tariffs discriminatorily to particular countries including South Korea.
Trump’s decision came after the proposal of the U.S. Department of Commerce last month that Trump should impose heavy tariffs or quotas on steel and aluminum imports as they “threaten to impair the national security”. It recommended three alternative remedies - a global tariff of at least 24 percent from all countries, a tariff of at least 53 percent on all steel imports from 12 countries including South Korea, or a quota for all countries equal to 63 percent of each country’s 2017 exports to the U.S.
By Ko Jae-man and Choi Mira
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