EU and US safeguarding measures likely to prompt disruptive protests and strikes in South Korea's manufacturing sectors

The European Commission imposed provisional safeguard measures on 19 July for up to 200 days on 23 steel product categories, implementing 25% tariffs after imports exceed the average during the past three years. These tariffs will probably affect South Korea's largest steel exporters, Hyundai Steel and POSCO: according to South Korean media, exports to the European Union account for 4% of these two firms' output. Smaller firms, including Nexteel and Seah Steel, have already lost KRW200 billion (USD176 million) because of the United States imposing an import quota for South Korean steel at 70% of the average imports from 2015 to 2017, according to the Pohang municipal authority. Secondarily, South Korean firms will probably be dampened by US measures against Chinese imports (see China: 11 July 2018: US-China trade war escalates as US plans tariffs on a further USD200 bil. of imports from China); China is South Korea's largest importer, with a majority of parts and finished industrial products going to China for export to the United States, specifically air conditioners, engines, and pumps.

Significance: These EU and US measures will probably contribute additional losses of thousands of jobs in South Korea's manufacturing sectors, which are already struggling because of slowing economic growth in its trading partners. For example, Sungdong Shipbuilding and STX Offshore & Shipbuilding have already reduced their employees by up to 50% since 2013, prompting approximately 1,500 Korean Metal Workers' Union members to protest in March 2018 in Gwanghwamun, Seoul. Although local authorities, such as Ulsan, which has the world's largest automotive assembly plant and shipyard, have promised to attempt to support local firms, they are unlikely to receive much-needed central-government funding. In February, the government refused to offer funds to GM Korea to restructure, resulting in the closure of one of its four plants in South Korea, and President Moon Jae-in pledged to reform overly close links between the government and the "chaebeol" conglomerates. Job losses and the probable decline in industrial output as a result of the EU and US measures will probably prompt disruptive protests and strikes, in particular in Seoul and industrial centres such as Busan, Pohang, and Ulsan. Disruption to operations will probably be exacerbated if related unions hold sympathy strikes, as rail workers did for truckers in December 2013 (see South Korea: 19 December 2013: Prospect of sympathy strikes raises risk of further cargo disruption in South Korean rail dispute).