Analysis Report: The Overhaul of U.S. Steel Tariffs and Its Impact on Korea's Export Industries

Market Summary and Analysis 

The U.S. Trump administration has completely overhauled the way it imposes tariffs on steel, aluminum, copper and derivative products under Section 232 of the Trade Expansion Act 

 

In response, the Ministry of Trade, Industry and Energy held an emergency video conference with major industry associations to review the impact on domestic industries and began preparing countermeasures

 

Key Points of the Tariff Overhaul 

The previous complex standard based on the value of metal content is abolished, and tariffs are imposed uniformly based on the total price of the finished product 

 

Items made almost entirely of metal will face a 50% tariff, and derivative products with a large proportion of the relevant metal will face a 25% tariff 

 

Industrial machinery and power grid equipment will be subject to a temporary 15% rate until next year, and products with a metal weight of less than 15%, such as cosmetics, chemical products and foodstuffs, are exempt

 

Implications for Investors 

The abolition of the obligation to calculate content value has reduced the administrative burden, but Korea's home appliance and auto parts industries, which export derivative products such as washing machines and refrigerators, now face pressure from rising costs due to the uniform 25% tariff 

 

As the system takes effect as soon as the 6th, investors should closely check changes in the export profitability of related companies in the second quarter, and since the share prices of companies in the export value chain may become more volatile depending on trade cooperation with major economies such as the EU, conservative risk management is needed