South Korea's steel industry is facing severe challenges. According to South Korea's Gyeonggi News on the 16th, South Korean steel giant Hyundai Steel recently announced that it has entered a "state of emergency."

Hyundai Steel's statement was not sudden. The Korea Times reported on the 15th that on the 12th, the US policy of imposing a 25% tariff on imported steel and aluminum products officially took effect. Against this background, South Korean companies have to face competition from Chinese and Japanese steel products, as well as the downturn in the domestic construction market and strikes initiated by unions. Hyundai Steel's senior management said that based on a comprehensive assessment of the domestic and foreign market environment, the company had to take a series of measures including cutting executive salaries by 20%, implementing a voluntary retirement plan for employees, reducing the operating scale of some factories, and reducing overseas business trips.

Yonhap News Agency reported that Hyundai Steel is South Korea's second largest steelmaker by sales, and its decision reflects the increasing pressure on South Korea's steel industry. Hyundai Steel reported in January that its revenue last year was 23.23 trillion won (1,000 won is about 5 yuan) and its operating profit was 314.4 billion won, down 10.4% and 60.6% year-on-year, respectively. However, affected by the performance bonus plan, the company revised its operating profit in February to a drop of 80% to 159.5 billion won.

The US steel and aluminum tariff policy not only has a direct impact on Hyundai Steel, but also has a significant impact on the entire Korean economy, steel industry and related industrial chains. According to South Korea's "news1" news network, South Korea is the fourth largest supplier of steel products in the US steel import market after Canada, Brazil and Mexico. Industry insiders said that the US market accounts for 35% of South Korea's total steel and aluminum exports and is an important export destination for South Korea. Previously, according to the South Korea-US Free Trade Agreement signed by the two countries in 2018, South Korea could enjoy an annual duty-free quota of 2.63 million tons of steel exported to the United States, but this quota was also canceled this time. Other economies affected by this tariff, such as the European Union and Canada, the largest importer of steel and aluminum in the United States, have immediately taken tariff countermeasures.

It is worth noting that due to insufficient relevant resources and response capabilities, the tariff policy has hit South Korea's small and medium-sized steel and aluminum companies particularly hard. South Korea's YTN TV station said that it is estimated that about 1,800 small and medium-sized Korean companies are affected by US tariffs. The government has planned to provide support to these companies. However, even so, the overall outlook for South Korea's steel industry is still not optimistic. It is predicted that the US tariff policy this time may cause the Korean steel industry to bear a burden of more than 1.2 trillion won.

Faced with the pressure of US tariff policies, Jeong In-gyo, director of the Trade Negotiations Bureau of the Ministry of Trade, Industry and Energy of South Korea, recently visited the United States and held talks with US Trade Representative Jamison Greer in Washington. According to the Korea Economic Daily, after the talks, Jeong In-gyo said that because the United States plans to impose "reciprocal tariffs" on April 2, he has asked the United States to exempt South Korea from tariffs or at least give it the same non-discriminatory treatment as other major countries.