Steel Industry Impact

[Anchor Lead]

The South Korean steel industry will suffer an impact from the U.S. decision to impose a 25% tariff steel imports. However if Washington's tariffs triggers a trade war with other countries, the situation could get even worse for South Korean industries.

[Pkg]

This steel firm specializes in exports of oil country tubular goods (OCTG) to the U.S. which are steel pipes and tubes for oil and gas drilling. It has already reduced production by half this month but will cut down more next month. This is because of Washington's decision to impose stiff 25% tariffs on imported steel, including from Korea.

[Soundbite] (Production Team Chief, Steel Manufacturer (Voice modified)) : "Our output from March was cut by half, and I hear there are further reductions planned from April."

The company will request U.S. client firms to raise their import costs but the situation is not optimistic. There are even concerns of labor force reduction. Some steel firms are reviewing a government support plan to maintain their employment through leaves of absence or training, instead of layoffs. Larger companies are also on alert even though their steel exports to the U.S. account for less than 5% of shipments. For now, they intend to continue exports to the U.S. while taking on the burden of high tariffs. But inevitably, their long term strategy will need to be revised. However, if other countries also raise their import tariffs in response to the U.S. decision, there is a growing sense of crisis that the worst case scenario will unfold.