Steelmakers search for answers to US protectionism

Steel products are piled on a yard at the Port of Pyeongtaek in Gyeonggi Province, Tuesday. Yonhap

Major steelmakers in Korea have ramped up efforts to find their own solutions to Washington's 25 percent metal tariffs that took effect on March 12, as the government has yet to come up with practical countermeasures against the U.S. protectionist trade policy.

While expressing their willingness to increase investments in the United States, these companies are also trying to curb the oversupply of low-priced Chinese products in the domestic market.

Hyundai Steel has taken the most aggressive measures.

The steelmaking unit of Hyundai Motor Group has already confirmed its $5.8 billion investment in the U.S. to build an electric arc furnace-based integrated steel mill in Louisiana, which will have an annual production capacity of 2.7 million tons.

With the aim of beginning commercial production by 2029, the company seeks to use the new steel mill to supply steel sheets to U.S. factories of Hyundai Motor and Kia, as well as to American and European carmakers.

"This investment is a clear demonstration that tariffs very strongly work," U.S. President Donald Trump said at the White House on March 24, when he met with Hyundai Motor Group Executive Chair Chung Euisun, who announced the planned construction of the steel mill as part of the automotive group's plan to invest $21 billion in the U.S.

Hyundai Steel CEO Seo Gang-hyun, right, raises his hand as U.S. President Donald Trump speaks in the Roosevelt Room of the White House in Washington, March 24 (local time). From left are Trump, Louisiana Gov. Jeff Landry, Hyundai Motor Group Executive Chair Chung Euisun, Hyundai Motor Group Vice Chair Chang Jae-hoon, Hyundai Motor President Sung Kim and Seo. AFP-Yonhap

Hyundai Steel has also taken the lead in filing antidumping complaints against its Chinese rivals.

Last July, the company claimed that the import of low-priced thick steel plates from China had hurt its business, leading the government to decide earlier this year to impose up to 38.02 percent antidumping tariffs on those products.

Compared to Hyundai Steel, POSCO has maintained a cautious stance on U.S. investments and Chinese products. However, the leading steelmaker in Korea has recently begun signaling its intent to invest in the U.S., fueling speculation that the company will also build an American steel mill.

"With a sense of crisis, we should achieve meaningful results by pushing ahead with new businesses and investments in lucrative markets with growth potential, such as India and the U.S.," POSCO Group Chairman Chang In-hwa said in an address for his company's 57th anniversary on Monday.

Kim Kyung-han, head of POSCO Holdings' global trade affairs team / Newsis

POSCO Holdings, the group's holding firm, also established a control tower to handle trade issues.

Kim Kyung-han, a former career diplomat and head of POSCO Holdings' communication division, has been appointed to lead the new control tower, which is under the chairman's direct supervision.

"We organized the team to better cope with the fast-changing global trade environment and policies," a POSCO Holdings official said.

SeAH Steel released a photo of CEO Lee Hwi-ryeong's meeting with the Alaska delegation last week when Alaska Gov. Mike Dunleavy visited Seoul to ask for Korea's purchase of liquefied natural gas (LNG) from his state and Korean companies' participation in the $44 billion project to construct a nearly 1,300-kilometer pipeline in his state.

"If the Alaska LNG project comes true, it will be a great opportunity for our company," Lee said during a banquet with Dunleavy on March 25.

Although the company remained cautious about making a decision on its participation in the project, it touted itself as a trustworthy steel pipe supplier for the LNG supply chain.

SeAH Steel CEO Lee Hwi-ryeong, fifth from left, and Alaska Gov. Mike Dunleavy, sixth from left, pose with participants in a banquet at a hotel in Seoul, March 25. Courtesy of SeAH Steel

Dongkuk Steel has remained skeptical about additional investments in the U.S., saying that a steel mill's construction cannot be finished until the end of Trump's term in 2029.

"Even if we bear the burden of tariffs, we should engage in fair competition in the global market," Dongkuk Holdings Vice Chairman Jang Se-wook told reporters on his way to attend the general meeting of shareholders on March 26.

However, he added that his company established a special task force to handle exports so that it can increase its exports through various channels.

In response to its foreign rivals, Dongkuk Steel is preparing an antidumping complaint against precoated metal sheets from China.

"We are in talks with the government to decide when we will file the complaint," a Dongkuk Steel official said.

Amid the major steelmakers' ongoing efforts to counteract global trade tensions, a survey by the Ministry of SMEs and Startups showed on Monday that four out of 10 small companies making products with steel and aluminum are still struggling to figure out the details of U.S. metal tariffs.

Among the 32.5 percent of respondents who answered that they are preparing countermeasures, more than half said that they have tried to reduce production costs.

"We will continue monitoring damages incurred by tariffs, providing customized support packages for small-size exporters," an SMEs ministry official said.

The government will also announce ways to upgrade the domestic steel industry by the end of this year, preventing the oversupply of Chinese steel products in the domestic market.

Last month, the government introduced changes to prohibit foreign steelmakers from circumventing Korea's antidumping regulations by exporting their products through a third country.