US’ 25% tariffs on all steel, aluminium imports start 12 March

SINGAPORE (ICIS)–The US will start imposing 25% tariffs on all steel and aluminium imports starting 12 March, under the executive order signed by US President Donald Trump on 11 February.

For South Korea, the US’ decision effectively cancels the annual tariff-free quota agreed upon between the two countries since 2018.

South Korea currently benefits from duty-free quota for 2.63 million tonnes of steel exports to the US, set under a 2018 bilateral agreement – based on 70% of the northeast Asian country’s 2015-2017 average annual exports – with US tariffs applying to excess volumes.

At the close of trade on Tuesday, shares of South Korean steel firm POSCO was down 0.84%, while the benchmark KOSPI Index inched up 0.71% to close at 2,539.05.

Foreign steel accounts for about 25% of US steel consumption, with Canada, Brazil, and Mexico being the largest suppliers, followed by South Korea and Vietnam, according to data from the American Iron and Steel Institute (AISI).

The new tariffs would terminate tariff-free quota deals with South Korea and other major metal exporters to safeguard American industries, the White House document said.

“Increasing and persistently high import volumes from countries exempted from the duties or subject to other alternative agreements like quotas and tariff-rate quotas have captured the benefit of U.S. demand at the domestic industry’s expense and transmitted harmful effects onto the domestic industry,” Trump said in the document.

“From 2022 to 2024, imports from countries subject to quotas (Argentina, Brazil and South Korea) increased by approximately 1.5 million metric tons, even as U.S. demand declined by more than 6.1 million tons during the period.”

Trump also on 10 February announced plans to impose “reciprocal” tariffs on countries with duties on US goods within the next two days.

ICIS senior economist for global chemicals Kevin Swift had said that the US tariffs on steel and other metals would translate to higher cost and could ultimately reduce capital expenditure in chemicals and industrial plants.