On the 3rd (local time), U.S. President Donald Trump signed a proclamation to raise the tariff on imported steel and aluminum from 25% to 50%, with the tariff taking effect at 12:01 a.m. (local time) on the 4th. The increased tariff comes just five days after the initial announcement, resulting in high tariffs on steel export products that were already loaded onto ships heading to the U.S.
This steel tariff increase took effect just five days after President Trump announced it at the U.S. Steel plant in Pittsburgh, Pennsylvania, on the 30th of last month. The 25% tariff imposed since March came into effect about a month after the proclamation was signed. A person in the steel industry noted, 'The tariff was raised too suddenly, and it was impossible to respond since it was unclear until the day after the announcement whether it was based on shipping or arrival dates.'
The 50% tariff on steel products will be finalized during the customs declaration process after arrival in the United States. For steel, it usually takes about a month and a half to two months from shipment to arrival in the U.S., meaning that products sent with the expectation of a 25% tariff will now incur a 50% tariff.
A person from HISTEEL said, 'If we retrieve those goods, the transactions with our clients would disappear, so there's nothing that can be done for the goods already sent. Specific response directions are still under discussion.'
Tariffs on products exported to the U.S. are generally based on the date of customs declaration. Other criteria include the date of arrival of the goods and the shipping date (the date the goods were loaded onto the ship in the exporting country). Some items go through customs declaration after being stored in a bonded (tariff-suspended) area and undergoing quarantine obligations.
The industry estimates that additional tariff burdens could amount to hundreds of billions of won annually. Last month's steel export to the U.S. was approximately $220 million (about 298 billion won), while April's export was $250 million (about 339 billion won).
A person in the industry commented, 'The worst-case scenario would be retrieving products that are already en route, but nothing has been decided yet. With the change of the president, it is time for the negotiation response team to establish a direction.' Another person from a steel company said, 'Local importers might bear part of the tariff, but there are limits. From the companies' standpoint, there's nothing they can do in this situation.'
Regarding the steel tariff, a representative from the Ministry of Trade, Industry and Energy said, 'We have conveyed our concerns to the U.S., but they have been very firm regarding Section 232 of the Trade Expansion Act, which forms the basis for the 50% tariff. We will continue to communicate our concerns and seek ways to address them.' The Trade Expansion Act 232 allows the government to impose tariffs if it determines that imports of specific items threaten national security.