By Lee Hyo-sik
POSCO, Hyundai Steel and other Korean steelmakers will have a much harder time exporting their products to the United States as it vows to restrict steel imports in the name of protecting national security, analysts said Friday.
U.S. President Donald Trump's order to investigate whether foreign steel products adversely affect U.S. national security is the latest in a series of steps by the populist leader to curb steel imports and revive the struggling U.S. steel industry.
Since his inauguration in January, Trump has been raising trade barriers for Korean and other foreign steelmakers, imposing anti-dumping tariffs, countervailing duties and other safeguard measures.
In a meeting with executives and labor leaders from U.S. steel companies at the White House Thursday, Trump signed an executive order invoking Section 232 of the Trade Expansion Act. The 55-year-old act, which allows emergency trade sanctions in the name of national security, is a precursor to erecting new trade barriers against foreign steel imports.
The Department of Commerce will be mobilized to conduct an investigation into whether foreign steel products infringe upon U.S. national security for 270 days. But Trump said it can be done in 50 days.
"I'm directing the Department of Commerce to immediately prioritize the investigation… into foreign steel arriving into our markets, and to submit a report on the effects of these foreign steel products on the national security of the United States," Trump said after signing the order. "Maintaining the production of American steel is extremely important to our national security and our defense industrial base."
If the commerce department concludes that steel imports pose a threat to U.S. national security, it can levy anti-dumping tariffs on them and take other safeguard measures against foreign steel imports.
Korean steelmakers could also be forced to take voluntary export restraint steps as Japanese carmakers did in the 1980s when the U.S. pressed Japan to limit car exports to the American market.
"There is no question that if Trump's executive order translates into action, this will damage Korean steelmakers' U.S. shipments," SK Securities analyst Kwon Soon-woo said. "But POSCO, Hyundai Steel and others will not be affected by it as much as they used to be in the past because the portion of their U.S. exports has declined over the years."
Kwon said if the latest U.S. move aims to go after Chinese steelmakers, the main culprit behind the global supply glut, Korean companies may benefit from it.
"It still remains to be seen," he said. "But if the U.S. takes harsher action against the Chinese, this could benefit POSCO and other local companies."
A Hyundai Steel official said there is nothing the company can do about whatever the U.S. government decides.
"We are a corporation that conducts business in a given environment," he said. "We believe it will take some time until the U.S. administration introduces tangible steps. When that happens, we will have to come up with steps to more effectively deal with them."
POSCO declined to comment on the issue, given its longstanding dispute with the U.S. commerce department, which has imposed anti-dumping duties on hot-rolled steel plates and other products of Korea's largest steelmaker.
The Korean Iron & Steel Association, which advocates for the interests of domestic steel firms, also refused to comment, saying it needs more time to review the matter.