Impending Tariffs

[Anchor Lead]

Seoul is holding last-minute negotiations with the U.S. with just 3 days left before Washington implements a 25% tariff on imported steel. The trade minister has expressed some optimism within the week but the steel industry is on high alert preparing for the worst case scenarios.

[Pkg]

An oil pipe is being formed out of a massive machine. The pipes are used to mine shale gas in the United States. This firm exported 85% of its output to the U.S. last year but it will suffer a devastating blow if additional tariffs are slapped on top of the 46% preliminary tariff rule already imposed. At a nearby storage area, steel goods that failed to be shipped overseas are piled up. This area where steel exports are processed for the final time right before shipping has come to a full stop.

[Soundbite] Gwon Dong-hyeok(Nexteel) : "Orders are sharply down so we are open but close to out of business."

This mid-sized firm eventually decided to transfer parts of its factory to the U.S. to avoid high tariffs. Company officials are engaged in their own methods of persuasion in the U.S.

[Soundbite] Park Hyo-jeong(Nexteel) : "We are contacting the U.S. Congress by joint efforts with our partner firms and have also sent many letters to the U.S. Commerce Department."

Dongkuk Steel has also temporarily suspended shipments to the U.S. while Husteel which relies heavily on exports to the U.S. has stopped operating some of its production lines. The firms are also renegotiating prices with clients and partner firms.

[Soundbite] (Steel Industry Official(Voice modified)) : "Australia, Mexico and Canada are exempt from U.S. tariffs and therefore more competitive than Korea."

Unlike larger Korean businesses which had already reduced their percentage of exports to America, the smaller firms that have been overwhelmingly shipping to the U.S. are nervously waiting for the outcome of government negotiations with just three days left until the tariffs' implementation.