The 25% US import tariff on steel threatens to push Pohang - the steel capital of South Korea - into crisis, as this key industry faces the risk of recession.
South Korea's largest steelmaker Posco seen from a residential area of Pohang - Photo: AFP
According to AFP, South Korea is the fourth largest steel export market for the US in 2024, accounting for 13% of the total steel imported by the US.
But now South Korea’s key industry is facing growing challenges from overseas markets. In addition, the 25% tariff that the US will impose on all steel imports in March could have serious impacts and major consequences for the South Korean economy.
Backbone of the national economy
For decades, Pohang - a city on the east coast of South Korea specializing in steel production - has contributed significantly to the country's rapid development.
In a context where South Korea is experiencing increasing regional inequality as most of its mineral resources are concentrated in the capital, Pohang has become a rare important industrial center.
"The steel industry is one of the country's key industries, providing core materials for key sectors such as construction, automobiles and shipbuilding. If the steel market collapses, the entire South Korean economy will be unstable," Pohang mayor Lee Kang Deok told AFP.
Mayor Lee worries about the future of the city's steel industry - Photo: AFP
The city is also home to Posco, a major pillar of the Korean steel industry, alongside other major conglomerates such as Hyundai Steel and Dongkuk Steel.
"Pohang has long been an iconic steel city that has played a key role in Korea's development over the decades," said Bang Sung Jun, a former employee at Hyundai Steel and now an official at the Pohang branch of the Korean Metal Workers' Union.
Mr. Bang also shared that how Pohang's steelmaking workforce responds to this crisis "will determine whether Pohang can maintain its steel industry, and whether the city can survive."
Brink of collapse
A Hyundai Steel steel plant in Pohang has been virtually closed since late last year - Photo: AFP
In recent years, the Korean steel market has faced increasing pressure due to oversupply - especially from China - as well as a decline in global steel demand.
The impending imposition of a 25% tariff on all steel and aluminum imports into the country by the US will exacerbate this challenge. Analysts warn that if cheap Chinese steel is banned from the US market and instead flows to regions such as Southeast Asia and Europe, South Korean steelmakers will face increasingly fierce price competition.
"Trump's protectionist policies will certainly affect the Korean steel industry - which is already suffering from cheap Chinese steel and an unfavorable exchange rate with the Japanese yen. The impact will be significant," said Professor Vladimir Tikhonov, a Korean studies expert at the University of Oslo.
For optimists, Mr Trump's tariffs will be an opportunity for South Korea to find new export markets.
However, for workers in Pohang, where several factories have closed, job security issues and the risk of job losses continue to overshadow any positive outlook.
"For us workers, this is a crisis with no way out," said union representative Bang.
Lee Woo Man, who has worked at Posco for two decades, predicts that unemployment in the city will “get worse” in the next four years. About 20 of his colleagues have lost their jobs in the past year.
For him, the US president's tax policy will push Pohang into recession as the city gradually loses its vitality.
Mr. Lee recalls his childhood days of seeing smoke rising from giant steel mills and thinking, "Posco is feeding Pohang."
But now, the scene only made him nervous.
“I don't know when things will collapse,” he mused.
Source: https://tuoitre.vn/nganh-thep-han-quoc-chao-dao-vi-thue-my-20250217221420873.htm
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