The United States imposed a 25% tariff on imported steel from 1:01 p.m. on the 12th of last month (Korean time), resulting in approximately a 9% decrease in steel exports from South Korean companies from the 1st to the 20th of this month. Steel exports turned to a downward trend starting in March, with the largest drop in steel shipments going to Mexico among major countries last month.
According to the steel industry on the 23rd, steel exports from the 1st to the 20th of this month amounted to $2.415 billion (approximately 3.43 trillion won), an 8.7% decrease compared to the same period last year. In February, steel exports increased by 5% year-on-year, but declined by 4.9% in March when the Trump administration imposed tariffs.
Among the top 10 steel exporting countries last year, Mexico recorded the largest decline last month. Mexico was the 6th largest steel exporter last year. According to the Korea Iron & Steel Association (KISCO), steel exports to Mexico last month were 141,864 tons (t), a 38% decrease compared to the same period last year. Exports to the United States fell by 13.9%.
The steel industry believes that the economic downturn in Mexico and the uncertainty of U.S. tariffs have affected steel demand. Monthly industrial production in Mexico has declined year-on-year for seven consecutive months from August of last year to February of this year. The manufacturing activity index also recorded 101.7 points in February, a 2.4% decrease compared to the same period last year.
Under these circumstances, analysts suggest that demand further contracted after President Trump announced in February that he would impose a 25% tariff on Mexico. The United States started imposing a 25% tariff on Mexican products from the 4th of last month but decided two days later to exempt products that meet origin regulations under the United States-Mexico-Canada Agreement (USMCA).
Although some tariffs were exempted, the heightened uncertainty is leading corporations in Mexico to respond conservatively. The United States accounts for 80% of Mexico's total exports. South Korean companies such as Hyundai Motor, Kia, Samsung, LG, Hyundai Mobis, and POSCO also have production bases in Mexico, importing and utilizing South Korean steel.
A steel industry official noted, "As the United States conducts tariff negotiations by country, the decline in exports may continue. The impact of tariffs on export decreases will become clearer in the second quarter."